Reclassification of Securities
Kyoto Inc. had the following portfolio of securities at the end of its first year of operations:
|
|
|
|
Year End |
|
Security |
Classification |
Cost |
Market Value |
|
A |
Trading |
$ 8,000 |
$13,000 |
|
B |
Trading |
15,000 |
18,000 |
1. Provide the entry necessary to adjust the portfolio of securities to its market value.
2. In the following year, Kyoto elects to reclassify security B as an available for sale security. On the date of the transfer, security B’s market value is $16,500. Provide the journal entry to reclassify security B.