Acc423-On December 21, 2012, Zurich Company provided you with the following information regarding…

E17-7 Trading Securities Entries

On December 21, 2012, Zurich Company provided you with the following information regarding its trading securities.

December 31, 2012

Investments (Trading)

Cost

Fair Value

Unrealized Gain (Loss)

Stargate Corp. stock

20,380

19,380

(1,000)

Carolina Co. stock

12,980

11,980

(1,000)

Vectorman Co. stock

20,380

20,910

530

Total Portfolio

53,740

52,270

(1,470)

Previous securities fair value adjustment balance – Securities fair value adjustment—Cr.

$(1,470)

During 2013, Carolina Company stock was sold for $12,550. The fair value of the stock on December 31, 2013, was: Stargate Corp. stock – $19,780; Vectorman Co. stock – $20,770.

Instructions:

(a) Prepare the adjusting journal entry needed on December 31, 2012.

(b) Prepare the journal entry to record the sale of the Carolina Company stock during 2013.

(c) Prepare the adjusting journal entry needed on December 31, 2013.

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