Question

Fill in the income statement below

The following Vermillion Corporation transactions are for bonds that were purchased as a held for trading investment for the year ended December 31, 2018:

Feb.	1		Purchased $224,000 of Leslye Corporation 3% bonds at 104 (this means 104% of maturity value). Interest is received semi-annually on August 1 and February 1. The bonds mature on February 1, 2020.
Aug.	1		Received interest on Leslye bonds.
	2		Sold $89,600 of the Leslye bonds at 101.
Dec.	31		Accrued interest on the remaining bonds.
	31		The fair value of the remaining bonds was 100 on this date. Determine the balance in each of the income statement accounts that are affected in the transactions above and indicate how they would be presented on the income statement for the year ended December 31, 2018. (Round answers to O decimal places, e.g. 5,250. Enter loss using either a negative sign preceding the number e.g.-2,945 or parentheses e.g. (2,945).) VERMILLION CORPORATION Income Statement (Partial)

Answer 1

		JOURNAL ENTRY
	Date	Account Title	Debit	Credit
	Feb,1,2018	Trading Securities	$232,960		(224000*1.04}
		Cash		$232,960
	August,1,2018	Cash	$3,360		(224000*3%*(6/12))
		Interest Income		$3,360
	August,2,2018	Cash	$90,496		(89600*1.01)
		Realized loss on trading securities	$2,688		(93184-90496)
		Trading Securities		$93,184	(89600*1.04)
	Dec.,31,2018	Interest Receivable	$1,680		(224000-89600)*3%*(5/12)
		Interest Income		$1,680
	Dec.,31,2018	Unrealized Loss on Trading Securities	$5,376		(224000-89600)*(1.04-1)
		Trading Securities		$5,376
		At the end of the year, the Realized and unrealized losses will be charged to the income
		Trading Securities (Lesley Corporation Bond)will be carried in the balance sheet at fair Value=					$134,400	(224000-89600)
		PARTIAL INCOME STATEMENT
		Trading Securities:
		Interest Income		$5,040	(3360+1680)
		Realized loss on trading securities	$2,688
		Unrealized Loss on Trading Securities	$5,376
		Total Loss on Trading Securities		$8,064
		Net Income From Trading Securities		-$3,024