RA DING SECURITIES In carly December of 2018 Blue Corp purch

RA DING SECURITIES In carly December of 2018, Blue Corp. purchased $43,200 of Yellow Company common stocks. lue accounts for the Yellow investment as Trading Securities. By December 31,2018, the value of the Yellow investment had fallen to $31,600, and Blue recorded an unrealized holding loss During 2019, Blue received $1,200 in dividends from Yellow Company. By December 31, 2019, the value of the Yellow investment had risen to $46,600 Record the following: 3/8/2018: Purchase of the Yellow Company stock. a. cash b. 12/31/2918: Ycar-end adjustment Loss Leprcciaf tem c. 2019: Receipt of dividends Divdends Rev 12 d. 12/31/2019: Year-end adjustment ocutn4OO

Solution

JOURNAL ENTRIES

IN THE BOOKS OF BLUE CORPORATION

DATE	PARTICULARS	DEBIT($)	CREDIT($)
2018
8-Mar	INVESTMENT IN YELLOW COMPANY A/C DR	43,200
	TO CASH A/C		43,200
	(BEING AMOUNT INVESTED IN STOCKS OF YELLOW COMPANY)
31-Dec	UNREALISED LOSS ON INVESTMENT IN YELLOW COMPANY A/C DR	11,600
	TO INVESTMENT IN YELLOW COMPANY A/C		11,600
	(BEING THE VALUE OF INVESTMENT FALLEN TO $31,600)
2019
	CASH A/C                                            DR	1,200
	TO DIVIDEND RECEIVABLE A/C		1,200
	(BEING CASH RECEIVED AS DIVIDENDS FROM YELLOW COMPANY)
31-Dec	INVESTMENT IN YELLOW COMPANY A/C                     DR	15,000
	TO UNREALISED PROFIT ON INVESTMENT IN YELLOW COMPANY A/C		15,000
	(BEING THE VALUE OF INVESTMENT RISEN TO $46,600)