Investments and fair value accounting

2012

Feb. 21 Pirchased 4,000 shares of astor Inc., as a trading security at $30 pepr share plus a brokerage commission of $600

Mar. 9 Purchased 800 shares of Milsaps Inc., as a trading security at $41 per share plus a brokerage commission of 160

May 3 Sold 600 shares of Astor Inc., for $27.50 per share less an $80 brokerage commission

June 8 received an annual dividend of $.22 per share on Astor Inc., stock

Dec 31 The portfolio of trading securities was adjusted to fair values of $32 and $30 per share for Astor Inc., and Milsaps Inc., respectively

2013

May 21 Purchased 2,000 shares of Essex Inc., as a trading security at $21 per share plus a $200 brokerage commission

June 11. Recieved an annual dividend of $0.25 per share on Astor Inc., stock

Aug. 16 Sold 400 shares of Essex Inc., for $25 per share less an $80 brokerage commission

Dec. 31 The portfolio of trading securities had a cost of $169,230 and a fair value of $170,560, requiring a debit balance in Valuation Allowance for Trading Investments of $1,330 ($170,560-$169,230). Thus, the credit balance from December 31, 2012, is to be adjusted to the new balance

Instructions:

1. Journalize the entries to record theses transactions.

2. Prepare the investment-related current asset balance sheet disc;losures for Heritage Insurance Co., on December 31, 2012.

How are unrealized gains or losses on trading investments disclosed on the financial statements of Heritage Insurance Company?