Second National Insurance Company provided this information for its trading securities portfolio: Required: 1. Provide the journal

Question:

Second National Insurance Company provided this information for its trading securities

Required:
1. Provide the journal entries to record the fair value adjustment on December 31, 2013. Assume that Second National uses an account entitled Fair value adjustment€”trading securities to adjust the cost of the trading portfolio to year-end fair values. Show supporting calculations in good form.
2. Provide the entry to record the sale of Company B€™s common shares on July 1, 2014. Assume that the last fair value adjustment for these shares was on December 31, 2013.
3. Provide the journal entry and supporting calculations for the fair value adjustment on December 31, 2014.
4. Provide the journal entry and fair value adjustment on December 31, 2015.
5. What would the entry to record the sale of Company B common shares on July 1, 2014, have been if this security had been considered an available-for-sale security? Ignore taxeffects.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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Requirement 1 Journal entry for fair value adjustment on 123113 Desired balance in Fair Value adjustment account Cost 80000 Fair value on 123110 85000 ...View the full answer

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Second National Insurance Company provided this information for its trading securities portfolio: Required: 1. Provide the journal

Question:

Fair Values Security Date Acquisition Cost12/3I113 I2I3II4123111S I2/31115 Company A Common Company B Common Company C Preferred Company D Common $50,000 30,000 20,000 10,000 $60,000$55,000 13,000* 25,000 $58,000 10,000 18,000 12,000 6/30/13 25,000

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Requirement 1 Journal entry for fair value adjustment on 123113 Desired balance in Fair Value adjustment account Cost 80000 Fair value on 123110 85000 ...View the full answer

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