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S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On...

S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2021, S&L purchased Coca-Cola bonds at par for $875,000 and sold the bonds on January 3, 2022, for $880,000. At December 31, the bonds had a fair value of $873,000.

Prepare journal entries to record (a) any unrealized gains or losses occurring in 2021 and (b) the sale of the bonds in 2022

1) Record the unrealized gains or losses occurring at year end.

Dec 31, 2021

Debit

Credit

2) Record the unrealized gains or losses occurring on the date of sale.

Jan 03, 2022

Debit

Credit

3)Record the sale of the Coca-Cola bonds in 2022.

Jan 03, 2022

Debit

Credit

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