Question

The accounting records of Jamaican Importers, Inc., at January 1, 2018. included the following: Assets: Investment in IBM common shares Less: Fair value adjustment $2,195,000 (230,000) $1,965,000 No changes occurred during 2018 in the investment portfolio. Required: Prepare appropriate adjusting entry(s) at December 31, 2018, assuming the fair value of the IBM common shares was 1. $1,415.000 2. $1,989,000 3. $2,205,000 (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Answer is not complete. No Transactions General Journal Credit Debit 550,000 X Investment in bonds Investment in bonds 550.000

Answer 1

1.

Journal Entries - Jamaican Importers, Inc.
Event	Particulars	Debit	Credit
1	Unrealized holding gain or loss - OCI Dr	$550,000.00
	To Fair value adjustment ($2,100,000 - $1,457,000)		$550,000.00
	(To record adjustment to fair value)
2	Fair value adjustment Dr	$24,000.00
	To Unrealized holding gain or loss - OCI		$24,000.00
	(To record adjustment to fair value)
3	Fair value adjustment Dr	$240,000.00
	To Unrealized holding gain or loss - OCI		$240,000.00
	(To record adjustment to fair value)

2. 1.

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1	Investment in AMC Supplies shares	620,000
	Cash		620,000
	(To record the purchase of investment in AMC Supplies shares)
2	Cash	21,600
	Investment revenue (540,000 shares*20%*0.20)		21,600
	(To record the dividend received)
3	Fair value adjustment	39,000
	Net unrealized holding gains and losses (659,000-620,000)		39,000
	(To record the adjusting entry of unrealized gain or losses)
4	No entry is required for net income in AMC supplies.

2.

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1	Investment in AMC Supplies shares	620,000
	Cash		620,000
	(To record the purchase of investment in AMC Supplies shares)
2	Investment in AMC Supplies shares	78,000
	Investment revenue (360,000*20%)		78,000
	(To record the net income)
3	Cash	21,600
	Investment in AMC Supplies shares (540,000 shares*20%*0.20)		21,600
	(To record the dividend recieved)
4	* No entry is required for fair value