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AnnZ [28]
3 years ago
9

Company had no investments prior to the current year. It had the following transactions involving short-term available-for-sale

and held-to-maturity securities during the year. Prepare journal entries to record the following transactions associated with the investment purchases.
January 10 Purchased 6,000 shares of Gray Company stock at $15.00 plus a broker's fee of $700. (Classified as short-term available-for-sale securities)
June 1 Purchased $180,000 of Duke Company 4%, five-year bonds at par value. Interest payments are paid semiannually on June 1 and December 1. (Classified as held-to- maturity)
July 1 Sold 3,000 shares of Gray company stock at $22 less a $600 brokerage fee.
December 1 Received a check for the first semiannual interest payment on the Duke Company bonds.

(show calculations in description of JE when appropriate) Date Description DR CR Jan. 10 June 1 July 1 Dec. 1
Business
1 answer:
baherus [9]3 years ago
6 0

Answer:

Date              Description                                     DR                 CR

Jan10           Short-term available for sales       $90,700

                     cash                                                                  90,700

June 1          Held to maturity securities          180,000

                     cash                                                                180,000

July 1        Cash                                                65,400

               brokerage fee                                      600                    

               Short-term available for sale securities              45,000

               Income statement                                                  15,000

workings

Jan 10     purchases = (6000*$15 ) + 700=  $90,700

july 1   sales  =   3000*$22 =  $66,000

Explanation:

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