What is the journal entry to record an unrealized loss on a “trading” security?
Since the investment is classified as “trading”, unrealized and realized activity is recognized in the income statement and not to other comprehensive income.
The company would debit unrealized loss on trading security (decreases net income) and credit the investment account (reduces the value of the investment in the form of a valuation allowance).
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What is the journal entry to record an unrealized gain on a “trading” security?
Since the investment is classified as “trading”, unrealized and realized activity is recognized in the income statement and not to other comprehensive income. The debit would be to the investment account in the asset section of the balance sheet, while the credit would be to unrealized gain on trading security, which would be in the […]
Where to record unrealized gains and losses on trading equity securities?
For an equity security that has been classified as “trading”, any unrealized gains or losses resulting from the change in fair value will be recorded directly into the income statement. For example, if the fair value on December 31, Year 1 was $100 and on December 31, Year 2 the fair value was $200, then […]
How are changes in fair value for equity securities recorded on the income statement?
Treatment varies depending on whether its classified as “trading” or “available-for-sale”. Additionally, you must determine whether the decline in fair value is temporary or other than temporary (i.e. permanent). Remember, to determine whether or not significant influence exists. For trading securities, unrealized and realized losses are recorded in the income statement. For available-for-sale securities, assuming […]