Homework Answers
Unrealized gain-equity = Fair value of securities - Purchase price for securities
= 69,800 - 64,700
= $5,100
Journal
|
Date |
Account Title and Explanation |
Debit |
Credit |
| Jan 1. | Fair value adjustment | 5,100 | |
| Unrealized gain-equity | 5,100 | ||
| (To record securities at their fair value) |
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December 31, 2020. None of these investments are accounted for
under the equity method.
Investments
Cost
Fair Value
1,500 shares of Gordon, Inc.,
Common
$77,600
$73,200
5,000 shares of Wallace
Corp., Common
172,900
167,700
400 shares of Martin, Inc.,
Preferred
63,500
65,100
$314,000
$306,000
All of the securities were purchased in 2020.
In 2021, Sage completed the following securities
transactions.
March 1
Sold the 1,500 shares of
Gordon, Inc., Common,...
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