On December 21, 2012, Zurich Company provided you with the following information regarding its trading securities.
|
December 31, 2012
|
|
Investments (Trading)
|
|
Cost
|
|
Fair Value
|
|
Unrealized Gain (Loss)
|
| Stargate Corp. stock |
|
$23,960 |
|
$22,960 |
|
$(1,000 |
) |
| Carolina Co. stock |
|
12,470 |
|
11,470 |
|
(1,000 |
) |
| Vectorman Co. stock |
|
23,960 |
|
24,580 |
|
620 |
|
| Total of portfolio |
|
$60,390 |
|
$59,010 |
|
(1,380 |
) |
| Previous fair value adjustment balance |
|
|
|
|
|
0 |
|
| Fair value adjustment-Cr. |
|
|
|
|
|
$(1,380 |
) |
During 2013, Carolina Company stock was sold for $12,000. The fair value of the stock on December 31, 2013, was: Stargate Corp. stock-$23,240; Vectorman Co. stock-$24,440.
| (a) |
|
Prepare the adjusting journal entry needed on December 31, 2012. |
| (b) |
|
Prepare the journal entry to record the sale of the Carolina Company stock during 2013. |
| (c) |
|
Prepare the adjusting journal entry needed on December 31, 2013. |