Question 15.4: Valuing Trading Securities at Fair Value On January 1, 20Y6...
Valuing Trading Securities at Fair Value
On January 1, 20Y6, Valuation Allowance for Trading Investments had a zero balance. On December 31, 20Y6, the cost of the trading securities portfolio was $79,200, and the fair value was $76,800. Prepare the December 31, 20Y6, adjusting journal entry to record the unrealized gain or loss on trading investments.
20Y6
Dec. 31 Unrealized Loss on Trading Investments . . . . . . . . . . . . . . . . . . . . . . 2,400
Valuation Allowance for Trading Investments . . . . . . . . . . . . . . 2,400*
To record decrease in fair value of trading investments.
*Trading investments at fair value, December 31, 20Y6 $ 76,800
Less trading investments at cost, December 31, 20Y6 \underline{ 79,200}
Unrealized loss on trading investments \underline{\$ (2,400)}