Investment accounting is really a classification problem. Once you know whether a security is held-to-maturity, trading, or available-for-sale — or whether you have significant influence — the journal entries follow mechanically.
The fork that trips people up is where the unrealized gain or loss goes. Trading securities run through net income. Available-for-sale securities run through other comprehensive income and sit in equity until the security is sold. Held-to-maturity debt isn't marked to fair value at all. And at 20% or more of the voting stock, you usually leave fair value behind entirely for the equity method, where dividends reduce the investment account instead of creating income.
These problems work through each classification and the adjusting entries that follow from it.
Problems for this topic are being written and recorded now.
Accuity courses follow your syllabus — lessons, exam-style practice, and walkthroughs for the problems you're actually assigned.
See the courses →