Question

Fair Value jourrnal entries, trading inestments

Jets Bancorps Inc. purchased a portfolio of trading securitiesduring 2014. The cost and fair value of this portfolio on Dec. 31,2014 was as follows:

Name # ofshares TotalCost Total Fair Value

DolphinsInc. 1,400 $28,000 $30,800

MarinoCo. 1,200 30,000 27,600

NamathCo. 800 28,000 26,400

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$86,000 $84,800

On May 10, 2015, Jets Bancorp Inc. purchased 1,000 shares ofGiants Inc. at 24 per share plus $150 brokerage fee. Provide thejournal entries to record the following:

a. The adjustment of the trading security portfolio to fairvalue on Dec. 31, 2014.

b. The May 10, 2015, purchase of Giants Inc. stock.

Fair value journal entries, trading investments

Last Unguaranteed Financial Inc. purchased the following tradingsecurities during 2014, its first year of operations:

Name Number ofShares Cost

Arden EnterprisesInc. 5,000 $150,000

French Broad IndustriesInc. 2,750 66,000

Pisgah ConstructionInc. 1,600 104,000

Total $320,000

The market price per share for the trading security portfolio onDec. 31, 2014, was as follows:

Market price per share,

Dec. 31, 2014

Arden EnterprisesInc. $ 34

French Broad IndustriesInc. $ 26

Pisgah ConstructionInc. $60

a. Provide the journal entry to adjust the trading securityportfolio to fair value on Dec. 31, 2014.

b. Assume the market prices of the portfolio were the same onDec. 31, 2015, as they were on Dec. 31, 2014. What would be thejournal entry to adjust the portfolio to fair value?