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
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. |
| 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 LevelIf Midwest uses IFRS, how would the accounting be different from U.S. GAAP? |
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
12th edition
1259918947, 1260091908, 978-1259918940
