The investments of Charger Inc. include an investment of trading securities of Raiders Inc. purchased on February $24,20$Y$7,$ for $$407,000.$ The fair value of the securities on December $31,20$Y$7,$ is $$495,000.$

Required:

a$.$ Journalize the entries for the February $24$ purchase and the adjustment to fair value on December $31,20$Y$7.$ Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

b$.$ How is a unrealized gain or loss for trading investments reported on the financial statements?

c$.$ If the Raiders Inc. securities had been classified as available$-$for$-$sale securities$,$ how would the investment be reported on the financial statements?

Answer rating: 100% (QA)

a Journal Entries 1 February 24 20Y7 Trading Securities Debit 407000 Cash Credit 407000 2 December 3... View the full answer