Chapin Company purchased investments in 2017 at a cost of $200,000 they recorded as trading securities. Their market values totaled $250,000 and $230,000 on December 31, 2017, and December 31, 2018, respectively. The entry required on December 31, 2018, would include a

Question

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The market value decreased from $250,000 in 2017 to $230,000 in 2018, resulting in a $20,000 loss. Therefore, a debit to Unrealized Holding Gain/Loss-Trading Securities of $20,000 is required to reflect this decrease in value.

Chapin Company Purchased Investments in 2017 at a Cost of $200,000