During 2008 and 2009,Kopson Co. made the following journal entries to account for transactions involving trading securities:

2008

(a) Nov. 1 Investment in Trading Securities'10% U.S. Treasury Bonds . . . 106,883

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,883

To record the purchase of $100,000 of U.S. Treasury

bonds at 103.25. Brokerage fees were $300. Interest is

payable semiannually on January 1 and July 1.

(b) Dec. 31 Unrealized Increase/Decrease in Value of

Available-for-Sale Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 4,283

Market Adjustment'Trading Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,283

To record the decrease in market value of the current

marketable securities based on the following data.

The beginning balance in Market Adjustment'Trading Securities was a $500 credit. There were no other entries in 2008.
2009
(c) Jan. 1 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Interest Revenue . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
To record interest revenue for 6 months
(d) July 1 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
To record interest revenue for 6 months
(e) Dec. 6 Investment in Available-for-Sale Securities'Fleming Co . . . . . . . 25,250
Investment in Trading Securities'Fleming Co . . . . . . . . . . . . . . . 25,250
To reclassify Fleming Co. stock from trading securities
to available-for-sale securities. Market price was $24,500
at the date of reclassification.
(f) Dec. 31 Unrealized Increase/Decrease in Value of Available-for-
Sale Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,483
Market Adjustment'Available-for-Sale Securities . . . . . . . . . . . . . . . . . . . . 300
Market Adjustment'Trading Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,183
To record the decrease in market value of available-for-sale
securities based on the following data.

There were no other entries in 2009.

Instructions:
For each incorrect entry, give the entry that should have been made. Assume the revenue approach is used. Ignore any premium or discount amortization on U.S. Treasurybonds.

Transcribed Image Text:

Cost Market Market Adjustment Fleming Co. stock Dobson Co. stock 10% US Treasury bonds. 33,950 103,000 $164,583 $160.300 25,250 23.350 32.450 106,883 $1.900 Cr. 1.500 Dr. 3,883 Cr. $4,283 Cr. Total Cost Market Mket Adjustment $ 32,450 32650 106,883 03,500 24,950 $ 200 Dr. 3,383 Cr. 300 Cr. $3,483 Cr. Dobson Co. stock 0% US Treasury bonds. Fleming Co. stock 25,250 Total $164,583 $161,100