Description of this paper

Prepare journal entries to record the following tr...

Description

Solution


Question

Prepare journal entries to record the following transactions and events of Kodan Company. 2008 Jan. 2 Purchased 30,000 shares of Goreten Co. common stock for $408,000 cash plus a broker's fee of $3,000 cash. Goreten has 90,000 shares of common stock outstanding and its policies will be significantly influenced by Kodan. Sept. 1 Goreten declared and paid a cash dividend of $1.50 per share. Dec. 31 Goreten announced that net income for the year is $486,900. 2009 June 1 Goreten declared and paid a cash dividend of $2.10 per share. Dec. 31 Goreten announced that net income for the year is $702,750. Dec. 31 Kodan sold 10,000 shares of Goreten for $320,000 cash. Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during calendar year 2008. Use the account Short-Term Investments for any transactions that you determine are short term. a. On February 15, paid $160,000 cash to purchase American General's 90-day short-term notes at par, which are dated February 15 and pay 10% interest (classified as held-to-maturity). b. On March 22, bought 700 shares of Fran Industries common stock at $51 cash per share plus a $150 brokerage fee (classified as long-term available-for-sale securities). c. On May 15, received a check from American General in payment of the principal and 90 days' interest on the notes purchased in transaction a. d. On July 30, paid $100,000 cash to purchase MP3 Electronics' 8% notes at par, dated July 30, 2008, and maturing on January 30, 2009 (classified as trading securities). e. On September 1, received a $1 per share cash dividend on the Fran Industries common stock purchased in transaction b. f. On October 8, sold 350 shares of Fran Industries common stock for $64 cash per share, less a $125 brokerage fee. g. On October 30, received a check from MP3 Electronics for three months' interest on the notes purchased in transaction d. Prepare journal entries to record the following transactions involving the short-term securities investments of Blake Co., all of which occurred during year 2008. a. On February 15, paid $120,000 cash to purchase RTF's 90-day short-term debt securities ($120,000 principal), dated February 15, that pay 8% interest (categorized as held-to-maturity securities). b. On March 22, purchased 700 shares of XIF Company stock at $27.50 per share plus a $150 brokerage fee. These shares are categorized as trading securities. c. On May 16, received a check from RTF in payment of the principal and 90 days' interest on the debt securities purchased in transaction a. d. On August 1, paid $80,000 cash to purchase Flash Co.'s 10% debt securities ($80,000 principal), dated July 30, 2008, and maturing January 30, 2009 (categorized as available-for-sale securities). e. On September 1, received a $1.00 per share cash dividend on the XIF Company stock purchased in transaction b f. On October 8, sold 350 shares of XIF Co. stock for $34 per share, less a $140 brokerage fee. g. On October 30, received a check from Flash Co. for 90 days' interest on the debt securities purchased in transaction d.

 

Paper#4903 | Written in 18-Jul-2015

Price : $25
SiteLock