On December 21, 2025, Indigo Company provided you with the following information regarding its equity investments. December 31, 2025 Investments Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $19,800 $18,900 $(900) Colorado Co. stock 9,400 8,500 (900) Buffaloes Co. stock 19,800 20,450 650 Total of portfolio $49,000 $47,850 (1,150) Previous fair value adjustment balance 0 Fair value adjustment-Cr. $(1,150) During 2026, Colorado Co. stock was sold for $8,960. The fair value of the stock on December 31, 2026, was Clemson Corp. stock- $19,000; Buffaloes Co. stock-$20,360. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2025. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2026. (c) Prepare the adjusting journal entry needed on December 31, 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. (b) (c) Date Account Titles and Explanation Debit
On December 21, 2025, Indigo Company provided you with the following information regarding its equity investments. December 31, 2025 Investments Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $19,800 $18,900 $(900) Colorado Co. stock 9,400 8,500 (900) Buffaloes Co. stock 19,800 20,450 650 Total of portfolio $49,000 $47,850 (1,150) Previous fair value adjustment balance 0 Fair value adjustment-Cr. $(1,150) During 2026, Colorado Co. stock was sold for $8,960. The fair value of the stock on December 31, 2026, was Clemson Corp. stock- $19,000; Buffaloes Co. stock-$20,360. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2025. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2026. (c) Prepare the adjusting journal entry needed on December 31, 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. (b) (c) Date Account Titles and Explanation Debit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...
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