Question

On December 21, 2020, Sage Company provided you with the following information regarding its equity investments. Securities Cost Fair Value Unrealized Gain (Loss) SC Corp. stock $42,000 38,400 $(3,600 ) True Co. stock 52,000 57,920 5,920 Plus, Inc. stock 26,800 26,503 (297 ) Total of portfolio $120,800 $122,823 2,023 Previous fair value adjustment balance -0- Fair value adjustment – Dr. $2,023 During 2021, the Plus, Inc. stock was sold for $27,270. The fair value of the stock on December 31, 2021, was: SC Corp. stock—$39,080; True Co. stock—$54,310. None of the equity investments result in significant influence.

Prepare the adjusting journal entry needed on December 31, 2020. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 enter an account title for the journal entry on December 31, 2017 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31, 2017 enter a debit amount enter a credit amount

Prepare the journal entry to record the sale of the Plus, Inc. stock during 2021. (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.) Date Account Titles and Explanation Debit Credit During 2021 enter an account title for the journal entry during 2018 enter a debit amount enter a credit amount enter an account title for the journal entry during 2018 enter a debit amount enter a credit amount enter an account title for the journal entry during 2018 enter a debit amount enter a credit amount

Prepare the adjusting journal entry needed on December 31, 2021. (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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 enter an account title for the journal entry on December 31, 2018 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31, 2018 enter a debit amount enter a credit amount

Answer 1

Prepare the adjusting journal entry needed on December 31, 2020.
Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2020	Unrealized Holding Gain or Loss- Income	$2,023.00
	Fair value adjustment		$2,023.00
Prepare the journal entry to record the sale of the Plus, Inc. stock during 2021.
Date	Account Titles and Explanation	Debit	Credit
During 2021	Cash	27270
	Gain on sale of investment		470
	Equity Investment (trading)		26800
Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2021	Fair value Adjustment	$1,413
	Unrealized Holding gain or loss - Income		$1,413
	Cost	FV	Profit(Loss)
SC Corp. stock	$42,000.00	$39,080	-$2,920
True Co. stock	52,000	$54,310	$2,310
			-$610
Unrealized Holding Gain or Loss- Income 2021			-2023
			$1,413