Asked by shyicambree sanders on May 16, 2024
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Terra Cotta Company has the following data at December 31 2017 for its securities: Securities Cost Fair Value Available-for-sale $34,000$39,000 Trading 46,00042,000\begin{array} { l r r } \text { Securities } & \text { Cost }& \text { Fair Value } \\\text { Available-for-sale } & \$ 34,000 & \$ 39,000 \\\text { Trading } & 46,000 & 42,000\end{array} Securities Available-for-sale Trading Cost $34,00046,000 Fair Value $39,00042,000 Instructions
Journalize the December 31 adjusting entries.
Trading Securities
Financial assets that a firm holds primarily for the purpose of selling them in the short term to profit from price fluctuations.
Adjusting Entries
Entries made at the end of an accounting period to ensure that companies follow the revenue recognition and expense recognition principles.
Fair Value
An estimate of the market value of an asset or liability, based on current conditions and willing parties' transactions.
- Execute computations and inscribe in accounting ledgers the positive gains, negative losses, dividends paid out, and interest incomes associated with investments.
- Record transactions related to the purchase, sale, and holding of investment securities, including adjustments for fair value.
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Learning Objectives
- Execute computations and inscribe in accounting ledgers the positive gains, negative losses, dividends paid out, and interest incomes associated with investments.
- Record transactions related to the purchase, sale, and holding of investment securities, including adjustments for fair value.
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