Fair Value Journal Entries, Available-for-Sale Investments Lipscomb Inc. purchas
ID: 2460305 • Letter: F
Question
Fair Value Journal Entries, Available-for-Sale Investments
Lipscomb Inc. purchased a portfolio of available-for-sale securities in 2014, its first year of operations. The cost and fair value of this portfolio on December 31, 2014, was as follows:
Name Number of Shares Total Cost Total Fair Value
Jasper, Inc. 1,100 $14,740 $16,360
Parker Corp. 750 24,600 26,810
Smithfield Corp. 250 8,000 7,600
Total $47,340 $50,770
On May 10, 2015, Lipscomb purchased 600 shares of Violet Inc. stock at $32 per share plus a $120 brokerage fee.
Provide the journal entries to record the following:
The adjustment of the available-for-sale security portfolio to fair value on December 31, 2014.
The May 10, 2015, purchase of Violet Inc. stock.
2014 Dec. 31
2015 May 10
Explanation / Answer
Dec 31 Available for Sale Securities....Dr $3,430
Unrealized Gain $3,430
May 10 Investment in Violet Inc..........Dr $19,320
Cash $19,320
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.