Reference no: EM132319552
Question
First Bank purchased the following securities during 2017 and classified them all as trading securities.??
Purchased 500 shares of Duke Company's common stock for $55 per share
Purchased 2,000 shares of Queen Company's common stock for $45 per share
Purchased 1,000 shares of Prince Company's preferred stock at $120 per share.
Received $3,000 of dividends during 2017 related to the common stock investments
?Fair Value at
Security
?Cost
12/31/2017
500 shares of Duke common stock
?$ 27,500
$ 30,000
2,000 shares of Queen common stock
90,000
105,000
1,000 shares of Prince preferred stock
120,000
115,000
?Totals
?$ 237,500
$ 250,000
?1.) Prepare journal entries to record the preceding information.
2.) What is the unrealized holding gain or loss and where is it reported on the 2017 financial statements?
3.) Prepare the journal entry to record the unrealized holding gain or loss.
4.) How would the bank report these securities on its balance sheet for the year ended 2017?