Journalize the transaction.
Company A purchased 6,500 shares for Solstice Corp. at $40 per share on December 31, 2015. The fair value for Solstice Corp. stock was $39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero.
| ate | Description | Debit $ | Credit $ |
| December 31, 2015 | Shares of Solstice Corp. | 260,000 | |
| To Cash | 260,000 | ||
| December 31, 2016. | valuation allowance account | 6,370 | |
| Shares of Solstice Corp
(40-39.02) * 6,500 |
6,370 |
Shares of Solstice Corp balance in the balancesheet is
= $ 260,000- 6370
= $253,630
Balnce of valuation allowance account is=
=6370
