Coronado Company has the following portfolio of investment securities at September 30, 2017, its last reporting date.
Trading Securities
Cost
Fair Value
Horton, Inc. common (5,180 shares) $217,560 $204,010 Monty, Inc. preferred (3,200 shares) 115,200 121,760 Oakwood Corp. common (930 shares) 171,120 170,150
On October 10, 2017, the Horton shares were sold at a price of $51 per share. In addition, 3,150 shares of Patriot common stock were acquired at $53 per share on November 2, 2017. The December 31, 2017, fair values were Monty $87,420, Patriot $136,340, and the Oakwood $183,240.
Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2017.
Coronado Company has the following portfolio of investment securities at September 30, 2017, its last reporting date.
| Trading Securities | Cost | Fair Value | ||
| Horton, Inc. common (5,180 shares) | $217,560 | $204,010 | ||
| Monty, Inc. preferred (3,200 shares) | 115,200 | 121,760 | ||
| Oakwood Corp. common (930 shares) | 171,120 | 170,150 |
On October 10, 2017, the Horton shares were sold at a price of $51 per share. In addition, 3,150 shares of Patriot common stock were acquired at $53 per share on November 2, 2017. The December 31, 2017, fair values were Monty $87,420, Patriot $136,340, and the Oakwood $183,240.
Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2017.
Related questions
Amalgamated General Corporation is a consulting firm that alsooffers financial services through its credit division. From time totime the company buys and sells securities intending to earnprofits on short-term differences in price. The following selectedtransactions relate to Amalgamated's investment activities duringthe last quarter of 2016 and the first month of 2017. The onlysecurities held by Amalgamated at October 1 were $45 million of 10%bonds of Kansas Abstractors, Inc., purchased on May 1 at facevalue. The company's fiscal year ends on December 31.
2016
Oct. 18 Purchased 2 million preferred shares of MillworkVentures Company for $72 million as a speculative investment to besold under suitable circumstances.
Oct. 31 Received semiannual interest of $2.7 million from theKansas Abstractors bonds.
Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprisesat their $66 million face value, to be held until they mature in2018. Semiannual interest is payable April 30 and October 31.
Nov. 1 Sold the Kansas Abstractors bonds for $41 million becauserising interest rates are expected to cause their fair value tocontinue to fall.
Dec. 1 Purchased 12% bonds of Household Plastics Corporation attheir $70 million face value, to be held until they mature in 2028.Semiannual interest is payable May 31 and November 30.
Dec. 20 Purchased U. S. Treasury bonds for $6.6 million astrading securities, hoping to earn profits on short-termdifferences in prices.
Dec 21. Purchased 4 million common shares of NXS Corporation for$64 million as trading securities, hoping to earn profits onshort-term differences in prices.
Dec. 23 Sold the Treasury bonds for $6.9 million.
Dec. 29 Received cash dividends of $3 million from the MillworkVentures Company preferred shares.
Dec. 31 Recorded any necessary adjusting entry(s) and closingentries relating to the investments. The market price of theMillwork Ventures Company preferred stock was $34.50 per share and$17.50 per share for the NXS Corporation common. The fair values ofthe bond investments were $63.7 million for Household PlasticsCorporation and $17.7 million for Holistic EntertainmentEnterprises.
2017
Jan. 7 Sold the NXS Corporation common shares for $60million.
| Required: |
Prepare the appropriate journal entry for each transaction orevent. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field.Enter your answers in millions rounded to 1 decimal place, (i.e.,5,500,000 should be entered as 5.5).) |
