Plotner Corporation has the following trading portfolio of stock investments as

Question

Plotner Corporation has the following trading portfolio of stock investments as of December 31, 2014.

On January 22, 2015, Plotner Corporation sold security C for $32,000.

Security Cost Fair Value A $19,000 $15,000 B 22,000 27,000 C 34,000 29,000 $75,000 $71,000 Prepare the adjusting entry for Plotner Corporation on December 31, 2014, to report the portfolio at fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Prepare the journal entry for the 2015 sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 22

Explanation / Answer

Dec-31 Unrealized Loss—Income 4000            Fair Value Adjustment—Trading. 4000 Jan-22 Cash 32000 Loss on Sale of Stock Investments 2000          Stock Investments 34000

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