Fair value journal entries, trading investments
Acorn Bancorp Inc. purchased a portfolio of trading securities during 2012. The cost and fair value of this portfolio on December 31, 2012, was as follows:
|
Name |
Number of shares |
Total cost |
Total Fair value |
|
Apex, Inc. |
1,200 |
$16, 000 |
$17,500 |
|
Evans Company |
700 |
23,000 |
19,000 |
|
Quaker Company |
300 |
9,000 |
8,600 |
|
Total |
$48,000 |
$45,100 |
On April 3, 2013, Acorn Bancorp Inc. purchased 500 shares of Luke, Inc., at $36 per share plus a $100 brokerage free.
Provided the journal entries to record the following:
a. The adjustment of the trading security portfolio to fair value on December 31, 2012.
b. The April 3, 2013, purchase of Luke Inc., stock.