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On June ( 30,20 imes 4 ), Prichard Company purchased some stock for ( $ 5,000 ). This stock was worth ( $ 6,000 )
On June ( 30,20 imes 4 ), Prichard Company purchased some stock for ( $ 5,000 ). This stock was worth ( $ 6,000 ) on December ( 31,20 imes 4 ), and it was worth ( $ 5,500 ) on December ( 31,20 imes 5 ). The investment has been properly classified as a trading investment since it was purchased. The entry necessary on December ( 31,20 imes 5 ), to record the change in value would include a debit directly to the retained earnings account to reduce it by ( $ 500 ) credit of ( $ 500 ) to the gain on trading investment account that would be reported on the income statement as an operating gain debit of ( $ 500 ) to the unrealized holding loss on trading investment account that would be reported on the income statement in the category of other income and (expenses) debit to the short-term investment account to increase it from ( $ 5,000 ) to ( $ 5,500 )
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