During the year ended December 31, 2019, and in the following months of January and February...

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During the year ended December 31, 2019, and in the following months of January and February 2020, Company Mhad the following

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Answer 1

Answer #1

Date	General journal	Debit	Credit
Apr 1, 2019	Investment in Trading securities	206,000
	cash		206,000
	(To record Purchase of Trading securities.) (Per share price = 206000/2000=103)

July 1	Cash	2,500
	Dividend income		2,500
	(To record dividend income on Trading securities.) ((20005)1/4)

July 1	Cash	57,500
	Realized gain on trading securities (57500-51500)		6,000
	Investment in Trading securities (500*103)		51,500
	(To record sale of Trading securities.) (Share available = 2000-500=1500)

Oct 1	Cash	1,875
	Dividend income		1,875
	(To record dividend income on Trading securities.) ((15005)1/4)

Nov 22	Dividend receivable	1,875
	Dividend income		1,875
	(To record dividend income.) ((15005)1/4)

Dec 31	Fair value adjustment (1500*13)	19,500
	Unrealized gain on trading securities (part of net income)		19,500
	(To record Fair value adjustment for Trading securities.) Increase in value= 116-103 = 13

Jan 1, 2020	Cash	1,875
	Dividend receivable		1,875
	(To record dividend received.)

Jan 31	Cash (700*92)	64,400
	Realized loss on trading securities (700*(116-92))	16,800
	Fair value adjustment (700*13)		9,100
	Investment in Trading securities (700*103)		72,100
	(To record sale of Trading securities.) (Share available = 1500-700=800)

Feb 15	Cash (500*118)	59,000
	Realized gain on trading securities (500*(118-116))		1,000
	Fair value adjustment (500*13)		6,500
	Investment in Trading securities (500*103)		51,500
	(To record sale of Trading securities.) (Share available = 800-500=300)

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