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Question

*PLEASE NOTE: I will report all Spam or solicitation to Chegg. Unless you can help me by answering this question directly, do not bother answering.

Wiffery Company had the following trading securities in its portfolio at December 31. The Fair Value Adjustment - Trading account had a balance of zero prior to year- end adjustment. Prepare the appropriate adjusting journal entry.

Short Term Investments Cost Fair Value

XBM $24,500 $25,900

Micro $51,000 $48,600

Outel $62,300 $61,000

Dull $29,900 $30,200

------------------------------------------------------------------

Totals $167,700 $165,700

Explanation / Answer

Hi,

Please find the answer as follows:

There will be only 1 entry at the close of the year for recording the Unrealized Holding Gain or Loss on trading securities.

Journal Entry - 31/12/2010

Unrealized Holding Gain or Loss - Income Dr. (167700 - 165700) 2000

Securities Fair Value Adjustment Cr. 2000

Thanks.

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