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During the month, Blue, Inc. purchased 1,050 shares for $5.00 per share and classified them...

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Accounting

During the month, Blue, Inc. purchased 1,050 shares for $5.00 per share and classified them as trading investments. At the end of the month, the price of the securities was $6.75 per share. What adjusting entry, if any, will Blue, Inc. record when it closes its books at the end of the month to reflect this change in value?

Dr. Valuation Allowance for Trading Investments $7,087.50
Cr. Unrealized Gain on Trading Investments $7,087.50

Dr. Valuation Allowance for Trading Investments $1,837.50
Cr. Unrealized Gain on Trading Investments $1,837.50

Dr. Unrealized Loss on Trading Investment $1,837.50
Cr. Valuation Allowance for Trading Investments $1,837.50

Because the trading investments were not sold during the month, no adjusting entry is required.

Dr. Valuation Allowance for Trading Investments $1,837.50
Cr. Realized Gain on Trading Investments $1,837.50

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