The investments of Charger Inc. include a single investment:14,560 shares of Raiders Inc. common stock purchased on February24, 2016, for $38 per share including brokerage commission. Theseshares were classified as trading securities. As of the December31, 2016, balance sheet date, the share price had increased to $41per share.
A.Journalize the entries to acquire the investment on February24, and record the adjustment to fair value on December 31, 2016.Refer to the Chart of Accounts for exact wording of accounttitles.
How is the unrealized gain or loss for trading investmentsreported on the financial statements?
CHART OF ACCOUNTS
121Allowance for Doubtful Accounts
161Investments-Raiders Inc. Stock
165Valuation Allowance for Trading Investments
166Valuation Allowance for Available-for-Sale Investments
192Accumulated Depreciation-Store Equipment
194Accumulated Depreciation-Office Equipment
251Sales Tax Payable
312Paid-In Capital in Excess of Par-Common Stock
322Paid-In Capital in Excess of Par-Preferred Stock
332Paid-In Capital from Sale of Treasury Stock
350Unrealized Gain (Loss) on Available-for-Sale Investments
A. Journalize the entries to acquire the investment on February24, and record the adjustment to fair value on December 31, 2016.Refer to the Chart of Accounts for exact wording of accounttitles.