Question

The Lumin Company made the following equity invesments in 2013.

Name	Cost	Market
JNJ	250,000	245,000
UNA	184,000	158,000
TGT	120,000	121,000
Total	554,000	524,000

In 2014, Lumin sold UNA for 172,000. The market value for 2014 for JNJ is 251,000 and for TGT is 128,000.

Prepare journal entries for the following actions:

- the market adjustment for 2013

- the sale of UNA

- the market adjustment for 2014

Answer 1

			Amount in $
	Year	Particulars	Debit	Credit
	2013	Unrealized holding Loss (Other comprehensive income )	5,000
		To Investment in JNJ		5,000
		( 250,000 - 245,000 )
	2013	Unrealized holding Loss (Other comprehensive income )	26,000
		To Investment in UNA		26,000
		( 184,000 - 158,000 )
	2013	Investment in TGT	1,000
		To Unrealized holding gain ( Other comprehensive income )		1,000
		( 121,000 - 120,000 )
	2014	Bank	1,72,000
		Realized loss on sale	12,000
		To Investment in UNA		1,58,000
		To Unrealized holding loss (earlier report in OCI- now out )		26,000
		( Sale of Investment in UNA )
	2014	Investment in JNJ	6,000
		To Unrealized holding loss (earlier report in OCI- now out )		5,000
		To Unrealized holding gain ( Other comprehensive income )		1,000
		(251,000 - 245,000 )
	2014	Investment in TGT	7,000
		To Unrealized holding gain ( Other comprehensive income )		7,000
		( 128,000 - 121,000 )