Trading Securities

Southeast Bank invests in trading securities and prepares quarterly financial statements. At the beginning of the fourth quarter of 2013, the bank held as trading securities 250 shares of Eglan Company common stock that originally cost $6,875. At that time, these securities had a fair value of $6,500. During the fourth quarter, the bank engaged in the following trading securities transactions:

Oct. 26 Purchased 280 shares of Farrell Company common stock for $35 per share.

Nov. 26 Sold 250 shares of Eglan common stock for $24 per share.

Dec. 10 Purchased 460 shares of Gray Company common stock for $40 per share.

On December 31, 2013, the quoted market prices of the shares were as follows: Eglan Company, $52 per share; Farrell Company, $38 per share; and Gray Company, $39 per share.

1. Prepare journal entries to record the preceding information for the fourth quarter. For compound entries, if an amount box does not require an entry, leave it blank.

2013	investments in trading securities	$?????
Oct 6	cash		$?????
Nov 26	cash	$?????
	loss on sale of trading securities	$?????
	investments in trading securities		$?????
Dec 10	investments in trading securities	$?????
	cash		$?????
Dec 31	investments in trading securities	$?????
	unrealized holding gain/loss: trading securities		$?????

2. Show what the bank reports on its fourth quarter 2013 income statement for these trading securities.

loss on sale of trading securities	$?????
unrealized holding gain	$?????

3. Show how the bank reports these trading securities on its balance sheet at the end of the fourth quarter of 2013.

current assets:

investments in trading securities (at fair value)

$?????