Texan Textiles Invested in Two Equity Securities in December 2018

question 75

Essay

Texan Textiles invested in two equity securities in December 2018. Neither investment represented significant influence. The company's fair value adjustment account has a balance of $0. The following information related to these securities:
$$\begin{array} { c c c c } \text { Security } & \text { Purchase Date } & \text { Cost } & \text { Fair Value - 12/31/18 } \\\hline 1 & 12 / 1 / 18 & \$ 27,300 & \$ 32,500 \\2 & 12 / 3 / 18 & 44,600 & 37,750\end{array}$$
Record journal entries needed for December relating to these securities.

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Definitions:

Permanent Accounts

These are ledger accounts that carry their ending balances into the next accounting period, typically including asset, liability, and equity accounts.

Temporary

In accounting, temporary refers to accounts that are closed at the end of an accounting period, such as revenues, expenses, and dividends.

Forthcoming Year

The approaching or upcoming calendar year.

Long-term Debt

Debt obligations of a business that are due more than one year in the future, often used for large purchases or investments.