Acc423 Intermediate Accounting: E17-7 On December 21, 2006, Bucky Katt Company provided you

Acc423 Intermediate Accounting

E17-7 (Trading Securities Entries)
On December 21, 2006, Bucky Katt Company provided you with the following information regarding its trading securities.
December 31, 2006
Investments (Trading) Cost Fair Value Unrealized Gain (Loss)
Clemson Corp. stock 20,000 19,000 (1,000)
Colorado Co. stock 10,000 9,000 (1,000)
Buffaloes Co. stock 20,000 20,600 600
Total of portfolio 50,000 48,600 (1,400)

Previous securities fair value adjustment balance -
Securities fair value adjustment-Cr. (1,400)
During 2007, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31, 2007, was: Clemson Corp. stock-$19,100; Buffaloes Co. stock-$20,500.

(a) Prepare the adjusting journal entry needed on December 31, 2006.
(b) Prepare the journal entry to record the sale of the Colorado Company stock during 2007.

(c) Prepare the adjusting journal entry needed on December 31, 2007.
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