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

Question

Business

Felix Davila

27 November, 23:49

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

+4

Answers (1)

Know the Answer?

Steven Bridges · Answer 1

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