Question
MA-6 (Static) Determining Financial Statement Effects of Trading Securities Transactions LOA-1 On January 1, 2018, Brian Company purchased at par $800,000, 6 percent bonds issued
MA-6 (Static) Determining Financial Statement Effects of Trading Securities Transactions LOA-1
On January 1, 2018, Brian Company purchased at par $800,000, 6 percent bonds issued by Laura Company to be actively traded. At December 31, 2018, the bonds had a fair value of $775,000. The bond investment was sold on July 1, 2019, for $802,000. Brian Companys fiscal year ends on December 31. Using the following categories, indicate the effects of the transactions listed above. (Enter a positive value for an increase, negative value for a decrease, and zero for a net effect of zero.)
balance | continued. | sheet | Income | continued. | Statement | ||
transaction date | transaction | assets | liabilities | stockholders equity | revenues/gains | expenses/losses | net income |
december 31, 2018 | record trading securities at fair value | 0 | |||||
july 1, 2019 | adjust to fair value | 27,000 | 0 | 27,000 | 27,000 | 27,000 | |
record the sale of trading securities | 0 | 0 |
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