Cost and Fair Value Data for the Trading Securities of McMahon

question 69

Short Answer

Cost and fair value data for the trading securities of McMahon Company at December 31, 2014, are $110,000 and $85,000, respectively. Which of the following correctly presents the adjusting journal entry to record the securities at fair value? a. $\begin{array}{lrr} \text { Dec. 31\quad Unrealized Loss-Income. } &25,000\\\quad\quad\quad\quad \text { Trading Securities} &&25,000\\\end{array}$

b. $\begin{array}{lrr} \text { Dec. 31 \quad Unrealized Gain-Income } &25,000\\\quad\quad\quad\quad \text { Trading Securities } &&25,000\\\end{array}$

c. $\begin{array}{lrr} \text { Dec. 31\quad Unrealized Loss-Income. } &25,000\\ \quad\quad\quad\quad\quad\text {Fair Value Adjustment-Trading } &&25,000\\\end{array}$

d. $\begin{array}{lrr} \text { Dec. 31 \quad Fair Value Adjustment-Trading } &25,000\\ \quad\quad\quad\quad\text { Unrealized Gain—Income} &&25,000\\\end{array}$

---

Definitions:

Mission

A statement or purpose that outlines an organization's reason for being, its core objectives, and how it seeks to achieve its goals.