securities were purchased in 2014): (1) 3,000 shares of Anderson Co. common stock which cost $58,500, (2) 10,000 shares of Munter Ltd. common stock which cost
$580,000, and (3) 6,000 sha r es of King Company p r efer r ed stock which cost $255,000. The Fair V alue Adjust-
ment account shows a c r edit of $10,100 at the end of 2014.
In 2015, Parnevik completed the following securities transactions.
1. On January 15, sold 3,000 shares of Anderson’s common stock at $22 per share less fees of $2,150.
2. On April 17, pu r chased 1,000 sha r es of Castle’s common stock at $33.50 per sha r e plus fees of $1,980.
On December 31, 2015, the market prices per share of these securities were Munter $61, King $40, and Castle $29. In addition, the accounting supervisor of Parnevik told you that, even though all these securi- ties have readily determinable fair values, Parnevik will not actively trade these securities because the top management intends to hold them for more than one year.
(a) P r epa r e the entry for the security sale on January 15, 2015.
(b) P r epa r e the journal entry to r eco r d the security pu r chase on April 17, 2015.
(c) Compute the un r ealized gains or losses and p r epa r e the adjusting entry for Parnevik on December
(d) How should the un r ealized gains or losses be r eported on Parnevik’s balance sheet?
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