On December 21, 2020, Ivanhoe Company provided you with the following information regarding its equity investments. December 31, 2020 Investments (Trading) Cost Fair Value Unrealized Gain (Loss) Clemson Corp.stock $(1,000) Colorado Co.stock $19,600 9,300 19,600 $18,600 8,400 20,170 (900) Buffaloes Co. stock 570 Total of portfolio $48,500 $47,170 (1,330) Previous fair value adjustment balance Fair value adjustment-Cr. $(1,330) During 2021, Colorado Co. stock was sold for $8,860. The fair value of the stock on December 31, 2021, was Clemson Corp.stock- $18,690; Buffaloes Costock$20,060. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2020. (b) Prepare the journal entry to record the sale of the Colorado Co.stock during 2021. (c) Prepare the adjusting journal entry needed on December 31, 2021. No. Account Titles and Explanation Debit Credit (a) Unrealized Holding Gain or Loss -Income 1,330 fai 1,330 (b) cash 8,860 Loss on Sale of Investments 440 Equity Investments 9,300 (c) fair 1330 Unrealized Holding Gain or Loss -Income 1020 Sunland Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method. Investments 1,500 shares of Gordon, Inc., Common 5,000 shares of Wallace Corp., Common 400 shares of Martin, Inc., Preferred Cost Fair Value $76,300 $71,400 163,700 158,400 62,400 63,800 $302.400 $293,600 All of the securities were purchased in 2020. In 2021, Sunland completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., Common, @$45 less fees of $1,200. April 1 Bought 700 shares of Earnhart Corp. Common, @ $75 plus fees of $1,300. Sunland's portfolio of equity securities appeared as follows on December 31, 2021. Investments Cost Fair Value 5,000 shares of Wallace Corp., Common $163,700 $158,400 700 shares of Earnhart Corp. Common 53,800 50,300 400 shares of Martin, Inc., Preferred 62,400 60,600 $279,900 $269,300 Prepare the general journal entries for Sunland Company for: (a) The 2020 adjusting entry. (b) The sale of the Gordon stock. (c) The purchase of the Earnhart stock. (d) The 2021 adjusting entry for the trading portfolio. Credit No. Account Titles and Explanation (a) Unrealized Holding Gain or Loss - Income Debit 8,800.00 Fair Value Adjustment 8,800.00 (b) cash 66,300.00 Loss on Sale of Investments 10,000.00 Equity Investments 76,300.00 (c) 51,200.00 Equity Investments cash 51,200.00 (d) Unrealized Holding Gain or Loss -Income 19,400.00 Fair Value Adjustment 19,400.00 eTextbook and Media
