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Exercise 13-8 Trading Securities- Midwest Bank invests in trading securities. At the beginning of December 2018,...

Exercise 13-8

Trading Securities- Midwest Bank invests in trading securities. At the beginning of December 2018, the bank held no trading securities. During December of 2018, it entered into the following trading securities transactions:

Dec. 10          Purchased 500 shares of Carroll Company common stock for $76 per share.

Dec. 21          Purchased 800 shares of Dynamo Company common stock for $34 per share.

At the end of December, The Caroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $33 per share.

Required:

  1. Prepare journal entries to record the preceding information.
  2. What is the unrealized holding gain or loss, and where is it reported in the 2018 financial statements?
  3. Show how the bank reports the trading securities on its December 31,2018, balance sheet?
  4. If Midwest uses IFRS, how would the accounting be different from U.S. GAAP?
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Exercise 13-8

Midwest Bank invests in trading securities. At the beginning of December 2018, the bank held no trading securities. During December of 2018, it entered into the following trading securities transactions:

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