Problem 1 - FINANCIAL ASSET AT FAIR VALUE

At the beginning of current year 2018, Gala Company purchased equity securities for P5,200,000. The entity

also paid commission, taxes and other transaction costs amounting to P200,000. The securities are quoted at

P5,500,000 at year-end. No securities were sold during the year. The transaction costs that would have been

incurred on the disposal of the investment are estimated at P100,000.

In 2019, no securities were sold. The quoted price of the securities end of 2019 is P4,500,000.

In 2020, half of the securities was sold at a selling price of 2,500,000. The entity incurred disposal costs worth

P30,000. The remaining securities are quoted at P2,750,000 at year end.

Required:

A. Provide journal entries to record the above transactions: