Reference no: EM132774682

In January 2018, the management of PT SUMBAWA Company concluded that it had sufficient cash to carry out several investments in debt and equity securities. During this year, the following transactions occurred.

1. Feb. 1 Purchased 60,000 ordinary shares of PT BANGKA (30% of the outstanding shares) IDR 90,000,000 plus a brokerage fee of IDR 600,000
2. March 1st. 8000 common shares of PT KILAT (10% of outstanding shares) were purchased for IDR 20,000,000 plus brokerage fees of IDR 400,000
3. July 1st. Purchased PT CITRA bonds for IDR 100,000,000, 8%, for IDR 92,278..000. Interest payments every semester on January 1 and July 1
4. August 1, PT BANGKA announced and paid a cash dividend of Rp 160 per share. Sept. 1 Received cash dividends of Rp 100 per share in PT KILAT's common shares.
5. Oct 1 Sold PT CITRA bonds with cash proceeds of IDR 92,750,000 after deducting brokerage fees of IDR 250,000.
6. 31 Dec. PT BANGKA reported a net income of IDR 460,000,000
7. 31 Dec. The fair value of PT KILAT's common shares is Rp 2800 per share

Problem (A) Make a journal for transactions and post it to the Debt Investments and Stock Investments accounts of each company (Use the T-account form.)

Problem (B) Prepare an adjusting entry as of December 31, 2020, to report investment securities at fair value. All Securities are deemed to be traded

Problem (C) Explain where the unrealized gain or loss is reported and under what account group.