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At the beginning of 2019, Able Company had the following portfolio of investments in trading...

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Accounting

At the beginning of 2019, Able Company had the following portfolio of investments in trading securities (all of which were acquired at par value):
Security Cost 1/1/2019 Fair Value
A $20,000 $25,000
B 30,00029,000
Totals $50,000 $54,000
During 2019, the following transactions occurred:
May 3 Purchased C debt securities at their par value for $50,000.
July 1 Sold all of the A securities for $27,000 plus interest of $1,000.
Dec. 31 Received interest of $7,600 on the B and C securities. Additionally the following information was available:
12/31/2019
Security
Fair Value
B $29,000
C 52,500
Required:
1. Prepare journal entries to record the preceding information.
2. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for trading securities?

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