During the year ended December 31, 2017, Mead Investment Corporation, a public company, had the following transactions

Question:

During the year ended December 31, 2017, Mead Investment Corporation, a public company, had the following transactions related to investments held for trading:

Feb. 1 Purchased 2,400 Lemelin common shares for $63,600.

Mar. 1 Purchased 600 RSD common shares for $7,500.

Apr. 1 Purchased $100,000 of MRT 4% bonds at par.

July 1 Interest is payable semi-annually on April 1 and October 1.

Aug. 1 Received a cash dividend of $2 per share on the Lemelin common shares.

Oct. 1 Sold 1,600 Lemelin common shares at $25 per share.

2 Received the semi-annual interest on the MRT bonds.

Dec. 31 Sold the MRT bonds for 101.

The fair values of the Lemelin and RSD common shares were $28 and $14 per share, respectively.

Instructions

(a) Record the transactions and any required year-end adjusting entries.

(b) Show the financial statement presentation of the trading investments and any related accounts in Mead's financial statements for the year ended December 31, 2017.

TAKING IT FURTHER

When Mead invested in the MRT bonds, was it anticipating that the market interest rate would go up or down? Explain.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...