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    kim3109's Avatar
    kim3109 Posts: 3, Reputation: 1
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    #1

    Oct 2, 2012, 05:49 PM
    Sale of investment portfolio
    Lansbury inc sold part of its investment portfolio for 15000. This transaction resulted in a gain of 3400 for the firm. The company classifies its investments as available for sale. Where do I start to journalize this?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Oct 2, 2012, 08:11 PM
    At the risk of being serious
    Open your journal
    Pick up your pen
    Debit investments
    Credit Profit on sale of Investments
    I'm sure you can guess where the difference goes
    kim3109's Avatar
    kim3109 Posts: 3, Reputation: 1
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    #3

    Oct 3, 2012, 08:32 AM
    Haha Paraclete I opened my journal, and picked up my pen lol. I really don't get the investments bit in this class. Can you be more specific about amounts so that I understand? The difference of 11600 goes to gains available for sale right?
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    paraclete Posts: 2,706, Reputation: 173
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    #4

    Oct 3, 2012, 02:44 PM
    That amount is by calculation the book value of the investment, So Credit investments; the sale price goes to bank, Debit Bank ; and the profit you were given, Credit, goes to profit on sale of investment
    kim3109's Avatar
    kim3109 Posts: 3, Reputation: 1
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    #5

    Oct 4, 2012, 02:10 PM
    Got it. Thank you!
    Quote Originally Posted by paraclete View Post
    That amount is by calculation the book value of the investment, So Credit investments; the sale price goes to bank, Debit Bank ; and the profit you were given, Credit, goes to profit on sale of investment
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