Question
Exercise 13-8 Trading Securities - Midwest Bank invests in trading securities. At the beginning of December 2018, the bank held no trading securities. During December
Exercise 13-8
Trading Securities- 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 Caroll 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:
- Prepare journal entries to record the preceding information.
- What is the unrealized holding gain or loss, and where is it reported in the 2018 financial statements?
- Show how the bank reports the trading securities on its December 31,2018, balance sheet?
- If Midwest uses IFRS, how would the accounting be different from U.S. GAAP?
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