On January 1, 2004, Davis company sold some of its available for sale securities
ID: 2471043 • Letter: O
Question
On January 1, 2004, Davis company sold some of its available for sale securities that originally cost $22,000 and whose market value at its last balance sheet date (12/31/2003) was $30,000. The securities were sold for $28,000. The sale will result in: a. a debit to realized loss on sale of securities of $2,000 b. a credit to realized gain on securities of $2,000 c. a credit to realized gain on securities of $6,000 d. a debit to realized loss on sale of securities of $6,000
The answer is C, but I don't understand why, pls show the work, thank you
Explanation / Answer
Answer is a debit to realized loss on sale of securities of $2,000
DR CR 12/31/2003 Investments – Available-for-sale 8000 Gain on available-for-sale securities 8000 DR CR Cash 28000 realized loss on sale of securities 2000 Investment 30000Related Questions
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