On December 21, 2020, Bucky Katt Company provided you with the following information regarding its equity investments.

During 2021, Colorado Co. stock was sold for $9,400. The fair value of the stock on December 31, 2021, was Clemson Corp. stock?$19,100; Buff aloes Co. stock?$20,500. None of the equity investments result in significant influence.

Instructions

a. Prepare the adjusting journal entry needed on December 31, 2020.

b. Prepare the journal entry to record the sale of the Colorado Co. stock during 2021.

c. Prepare the adjusting journal entry needed on December 31, 2021.

Transcribed Image Text:

December 31, 2020 Unrealized Gain (Loss) $(1,000) (1,000) Investments Fair Value Cost Clemson Corp. stock Colorado Co. stock Buffaloes Co. stock Total of portfolio Previous fair value adjustment balance Fair value adjustment–Cr. $20,000 $19,000 9,000 20,600 10,000 600 (1,400) $50,000 $48,600 -0- $(1,400)