Reference no: EM133005861
On December 1, 2020, Pearl Co. purchased equity securities as trading securities. On December 31, 2020, the cost of the securities was as follows:
Security A: $255,000; Security B: $152,000 and Security C : $375,000.
The fair value of these securities at December 31, 2020 were;
Security A: $250,000; Security B: $170,000 and Security C: $230,000.
Problem 1: The adjusting entry to report investment securities at fair value on December 31, 2020 is
Select one:
a. Fair Value Adjustment-Trading______________________122,000
Unrealized Gain or Loss - Income_________________________122,000
b. Unrealized Loss - Income__________________________132,000
Fair Value Adjustment-Trading____________________________132,000
c. Fair Value Adjustment - Trading____________________100,000
Unrealized Gain - Income________________________________100,000
d. Unrealized Gain or Loss - Equity___________________130,000
Fair Value Adjustment-Trading___________________________130,000