Answer:
Gray stocks 90,700 debit
Cash 90,700 credit
Duke- Bond 180,000 debit
Cash 180,000 credit
Cash 65,400 debit
Gray stocks 45,350 credit
Gain on Securities 20,050 credit
Dec 1st
Cash 3,600 debit
Interest revenue 3,600 credit
Explanation:
Jan 10th
6,000 x $15 + 700 fee = $90,700
June 1st we record at cost as it was purchase at par.
July 1st
3,000 x $22 - 600 fee = $65,400
Cost: 90,700 x 3,000/6,000 = 45,350
Gain 65,400 - 45,350 = 20.050
December 1st
180,000 x 0.02 = $3,600
the rate is 4% payment semiannually so we divide the rate by 2.
