(Answered) Question 2 investments - available-for-saletrading

Accounting

Question 2 (Investments - Available-for-Sale/Trading Securities)

The following information is available for Thompson Company at December 31, 2015, regarding its investments.

Securities Cost Fair Value

3,000 shares of ABC Corporation Common Stock $40,000 $46,000

1,000 shares of HIJ Corporation Preferred Stock $25,000 $22,000

$65,000 $68,000

a. Prepare the adjusting entry (if any) for 2015, assuming the securities are classified as trading.

b. Prepare the adjustment entry (if any) for 2015, assuming the securities are classified as available-for-sale.

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