Unrealized Gain Loss for Held for Trading Investment
I am confused regarding following example from curiculum
“On 1 January 2011, Baxter Inc. invested £300,000 in Cartel Co. debt securities (with a 6 percent stated rate on par value, payable each 31 December)”. The effective interest rate was 4.5%. At the end of the year the fair value of the securities is £350,000. It records 53,000 unrealized gains and 13,500 interest income on IS. I am confused why it is reporting 53000 unrealized gain/loss. Since it is a Held for Trading security carrying value was 300K. so If FV at the end of the year is 350 K then it should show 50K as Unrealized Gain/Loss. However Curriculum example 1 show it as 53K(350K -297K) . 297K it is recognizing as carrying value for security.