RA DING SECURITIES In carly December of 2018, Blue Corp. purchased $43,200 of Ye

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RA DING SECURITIES In carly December of 2018, Blue Corp. purchased $43,200 of Yellow Company common stocks. lue accounts for the Yellow investment as Trading Securities. By December 31,2018, the value of the Yellow investment had fallen to $31,600, and Blue recorded an unrealized holding loss During 2019, Blue received $1,200 in dividends from Yellow Company. By December 31, 2019, the value of the Yellow investment had risen to $46,600 Record the following: 3/8/2018: Purchase of the Yellow Company stock. a. cash b. 12/31/2918: Ycar-end adjustment Loss Leprcciaf tem c. 2019: Receipt of dividends Divdends Rev 12 d. 12/31/2019: Year-end adjustment ocutn4OO

Explanation / Answer

JOURNAL ENTRIES

IN THE BOOKS OF BLUE CORPORATION

DATE PARTICULARS DEBIT($) CREDIT($) 2018 8-Mar INVESTMENT IN YELLOW COMPANY A/C DR    43,200 TO CASH A/C 43,200 (BEING AMOUNT INVESTED IN STOCKS OF YELLOW COMPANY) 31-Dec UNREALISED LOSS ON INVESTMENT IN YELLOW COMPANY A/C DR 11,600 TO INVESTMENT IN YELLOW COMPANY A/C         11,600 (BEING THE VALUE OF INVESTMENT FALLEN TO $31,600) 2019 CASH A/C                                            DR 1,200          TO DIVIDEND RECEIVABLE A/C 1,200 (BEING CASH RECEIVED AS DIVIDENDS FROM YELLOW COMPANY) 31-Dec INVESTMENT IN YELLOW COMPANY A/C                     DR 15,000 TO UNREALISED PROFIT ON INVESTMENT IN YELLOW COMPANY A/C 15,000 (BEING THE VALUE OF INVESTMENT RISEN TO $46,600)

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