E17-7 - Description/Account(c Prepare the adjusting journal...

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Answer E17-7 (Trading Securities Entries) On December 21, 2012, Zurich Company provided you with the following information regarding its Equity Investments (Trading). December 31, 2012 Investments(Trad ing) Cost Fair Value Unrealized Gain (Loss) Stargate Corp. stock $20,000   $19,000   $(1,000)   Carolina Co. stock 10,000   9,000   (1,000)   Vectorman Co. stock 20,000   20,600   600    Total Portfolio $50,000   $48,600   (1,400)   Previous securities fair value adjustment balance             -0-      Fair Value Adjustment (Trading)—Cr.         $(1,400)   During 2013, Carolina Company stock was sold for $9,500. The fair value of the stock on December 31, 2013, was: Stargate Corp. stock- $19,300; Vectorman Co. stock-$20,500. (a) Prepare the adjusting journal entry needed on December 31, 2012.   Description/Account        (b) Prepare the journal entry to record the sale of the Carolina Company stock during 2013.  (List multiple debit/credit entries from largest to smallest 
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Unformatted text preview: Description/Account (c) Prepare the adjusting journal entry needed on December 31, 2013. Description/Account Solution E17-7 Description/Account Debit Credit (a) Unrealized Holding Gain or Loss—Income 1,400 Fair Value Adjustment (Trading) 1,400 (b) Cash 9,500 Loss on Sale of Securities 500 Trading Securities 10,000 (c) Fair Value Adjustment (Trading) 1,200 Fair Value Adjustment (Trading) 1,200 December 31, 2013 Securities Cost Fair Value Unrealized Gain (Loss) Stargate Corp. stock $20,000 $19,300 $(700) Vectorman Co. stock 20,000 20,500 500 Total Portfolio $40,000 $39,800 (200) Previous securities fair value adjustment balance—Cr. ($1,400) Fair Value Adjustment (Trading)—Dr. $1,200...
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