Answer:
equity securities Washinton Co 6,240 debit
cash 6,240 credit
--to record the purchase--
cash 3,600 debit
gain on equity securities 480 credit
equity securities Washinton Co 3,120 credit
--to record sale--
unrealized loss 320 debit
equity securities Washinton Co 320 credit
--to record year-end adjustment--
Explanation:
purchase: 160 shares x $39 each = $6,240
sale:
sold 80 shares x $45 each = 3,600
book value 80 shares x $39 = 3,120
gain on sale 480
year end adjustment:
book value 80 shares as $39 3,120
market value at year-end $35 2,800
unrealized loss 320
It is unrealized as we didn't sale the shares their price could change again therefore it is not realized.
