The following information is related to the short-term passive investments of Solo Company. Securities held on December 31, 2016, are described in the table below.
$\begin{array}{|r|r|r|r|r|r|}
\hline\text { Securities } &\text { No. of }& \text { Cost/Share } &\text { Total } & \text { Value/Share } &\text { Total Market } \
&\text { Shares }&&\text { Cost }&&\text { Value }\
\hline\text { AAA } & 100 & \$ 29 & \$ 2,900 & \$ 34 & \$ 3,400 \
\hline \text { BBB } & 250 & 30 & 7,500 & 28 & 7,000 \
\hline \text { CCC } & 150 & 16 & 2,400 & 20 & 3,000 \
\hline&&&\$12,800&&\$13,400\
\hline
\end{array}$
Early in 2017, Solo sold all of its investment in AAA securities for $36 per share.
The journal entry to record the sale in 2017 will include:

Question

The following information is related to the short-term passive investments of Solo Company. Securities held on December 31, 2016, are described in the table below.
$\begin{array}{|r|r|r|r|r|r|}
\hline\text { Securities } &\text { No. of }& \text { Cost/Share } &\text { Total } & \text { Value/Share } &\text { Total Market }  \
&\text { Shares }&&\text { Cost }&&\text { Value }\
\hline\text { AAA } & 100 & \$ 29 & \$ 2,900 & \$ 34 & \$ 3,400 \
\hline \text { BBB } & 250 & 30 & 7,500 & 28 & 7,000 \
\hline \text { CCC } & 150 & 16 & 2,400 & 20 & 3,000 \
\hline&&&\$12,800&&\$13,400\
\hline
\end{array}$
Early in 2017, Solo sold all of its investment in AAA securities for $36 per share.
The journal entry to record the sale in 2017 will include:

Quizplus · Accepted Answer

The sale of AAA securities will result in a gain, as they were sold for $36 per share, which is $2 above the cost of $34 per share. Therefore, there will be a credit to Gain on Sale of Investments for $200. There will not be a debit to Short-term Equity Investments as the securities have been sold. There will not be a credit to Unrealized Loss as the loss has become realized due to the sale. Finally, there will not be a credit to Loss on Sale of Investments as there is a gain on the sale.

The Following Information Is Related to the Short-Term Passive Investments