Global Commerce Corporation purchased trading debt investments for $136,000 on D

Question

Global Commerce Corporation purchased trading debt investments for $136,000 on December 31, 2018. There is a decrease of $3,400 in the fair value of the trading debt investments by the end of the year 2019. Which of the following is the correct journal entry?

A

Losslong dash—Trading

3,400

Adjustmentlong dash—Trading

3,400

B.

Adjustmentlong dash—Trading

3,400

Losslong dash—Trading

3,400

C.

Trading Debt Investments

3,400

Losslong dash—Trading

3,400

D.

Losslong dash—Trading

3,400

Retained Earnings

Losslong dash—Trading

3,400

Adjustmentlong dash—Trading

3,400

Explanation / Answer

Unrealized Holding Loss-Trading 3400            Fair Value Adjustment-Trading 3400 Option A is correct

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