Concept #1: Purchasing Available-for-Sale Securities

Concept #2: Dividend Revenue for Available-for-Sale Securities

Concept #3: Unrealized Gains and Losses for Available-for-Sale Securities (1)

Concept #4: Unrealized Gains and Losses for Available-for-Sale Securities (2)

Concept #5: Realized Gains and Losses for Available-for-Sale Securities

Practice: Reset Company held investments in available-for-sale securities with a fair value of $180,000 as of December 31, 2017. Reset had originally purchased the investments at a price of $152,000 on January 1, 2017. What is the appropriate amount for Reset to report for these investments on its December 31, 2017 balance sheet?

Practice: Chitty Company often has excess cash on hand to invest. Suppose that Chitty purchases 640 shares of Bang Company common stock at a price of $35 per share. Chitty classifies the investment as available-for-sale securities. This purchase occurred on December 9, 2018. As of December 31, the market price of Chitty stock had increased to $41 per share. Chitty’s journal entry on December 31, 2018 related to the investment in Bang Company stock would include: