Question
Willow Creek Incorporated had the following portfolio of securities on December 31, 2014 Security Classification Cost Fair value Dec. 31, 2014 A Trading 18,000 23,000
Willow Creek Incorporated had the following portfolio of securities on December 31, 2014
| Security | Classification | Cost | Fair value Dec. 31, 2014 |
| A | Trading | 18,000 | 23,000 |
| B | Trading | 31,000 | 37,000 |
| C | Available for Sale | 3,000 | 6,000 |
| D | Available for Sale | 12,000 | 14,000 |
| E | Available for Sale | 34,000 | 28,000 |
| F | Held to maturity | 65,000 | 67,000 |
The balance in the market adjustment accounts as of Jan 1, 2014 were as follows:
Market Adjustments Trading Securities $9,000 Dr.
Market Adjustments Available for Sale Securities 3,600 Cr.
During 2015, Willow Creek determined that certain securities should be reclassified. Those reclassifications are as follows:
| Security | Old Classification | New Classification | Fair Value at Date of Reclassification |
| A | Trading | Available for Sale | $ 24,400 |
| C | Available for Sale | Trading | 5,200 |
| D | Available for Sale | Held to maturity | 15,000 |
| F | Held to maturity | Trading | 63,500 |
Make the necessary journal entries to adjust Willow Creeks portfolio of securities to fair value as of December 31, 2014
Make the necessary journal entries to reclassify the securities in 2015
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Auditing And Assurance Services
Authors: William Messier, Steven Glover, Douglas Prawitt
8th Edition
0078025435, 9780078025433
