Question 1 Skysong Company has the following securities in i

Question 1 Skysong Company has the following securities in its portfolio on December 31, 2017. None of these investments are accounted for under the equity method. Cost Fair Value 1,500 shares of Gordon, Inc., Common 5,000 shares of Wallace Common 400 shares of Martin, in, Preferred 7,300 301,000 295.300 All of the securities were purchased in 2017 In 2018, Skysong completed the following securities transactions. Sold the 1,500 shares of Gordon, Inc., Common, @45 less fees of $1,200 Bought 700 shares of Earnhart Corp., Common, @75 plus fees of $1.300 Mrd. Apm 1 Skysong\'s portfolio of equity securities appeared as follows on December 31, 2018 5,000 shares of Wallace Corp. Common 700 shares of Earnhart Corp. Common 400 shares of Martin, Inc, Prefered 174,800 169 400 53,800 $254200 $ 273,200 Prepare the general journal entries for Skysong Company for: (a) The 2017 adjusting entry (b) The sale of the Gordon stock () The purchase of the Eamhart stock (d) The 2018 adjusting entry for the trading portola (Credit account titles are automatically indented when amount is entered. Do not indent manually If no entry is required, select \"No Entry for the account titles and enter 0 for the amounts.) ic NOW LONT

Solution

No. Account Titles and Explanation Debit Credit (a) Unrealized loss on investment 7700 Valuation allowance for Investments ($303000 - $295300) 7700 (b) Cash [(1500 x $45) - $1200] 66300 Loss on sale of investment 2300 Investments 68600 (c) Investments 53800 Cash [(700 x $75) + $1300] 53800 (d) Unrealized loss on investment 3300 Valuation allowance for Investments ($284200 - $273200 - $7700) 3300