Midwest Bank invests in trading securities. At the beginning of December 2018, the bank held no trading
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Question:
Midwest Bank invests in trading securities. At the beginning of December 2018, the bank held no trading securities. During December of 2018, it entered into the following trading securities transactions:
Dec. 10 | Purchased 500 shares of Carroll Company common stock for $76 per share. |
Dec. 21 | Purchased 800 shares of Dynamo Company common stock for $34 per share. |
At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $33 per share.
Required:
1. | Prepare journal entries to record the December 2018 transactions. |
2. | What is the unrealized holding gain or loss, and where is it reported in the 2018 financial statements? |
3. | Show how the bank reports the trading securities on its December 31, 2018, balance sheet. |
4. | Next Level If Midwest uses IFRS, how would the accounting be different from U.S. GAAP? |
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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