Homework Answers
Unrealized holding loss on trading debt investment is reported under the income statement.
| Date | Accounts titles and explanation | Debit | Credit | |
| Jan 1 | Investment in trading debt securities | $ 3,081,288 | ||
| Cash | $ 3,081,288 | |||
| To record acquisition of trading debt investment. | ||||
| Dec 31 | Cash | $ 351,700 | ||
| Interest revenue | $ 351,700 | |||
| To record interest revenue. (3517000*10%) | ||||
| Dec 31 | Unrealized holding loss - (Net income) | $ 69,288 | ||
| Fair value adjustment | $ 69,288 | |||
| To record fair value adjustment. (3081288-3012000) |
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