On June 1, 2022, Mango Corp.purchased Papaya Corp.common shares for $12,100 as a trading investment.Three months later, Mango sold these shares for $13,000.The entry to record the sale would include a
A)debit to Cash of $12,100.
B)credit to Interest Income of $900.
C)credit to Trading Investments of $13,000.
D)credit to Realized Gain on Trading Investments of $900.

Question

Quizplus · Accepted Answer

The correct entry to record the sale of trading investments includes crediting the Realized Gain on Trading Investments for the difference between the sale price ($13,000) and the purchase price ($12,100), which is $900. This reflects the gain realized from the sale of the investment.