Sparta Investments Ltd. had the following short-term investments in marketable securities at fair value at December 31, 2013:
Alberta Energy Co ..........................$310,000
Finning Ltd ....................................180,000
Canadian National Railway..................285,000
Total short-term investments...............$775,000
Sparta Investments Ltd. had the following investment transactions during 2014:
2014 Jan. 5 Purchased 5,000 shares (2 percent) of HHN Ltd. as a short-term investment. The shares were purchased at $51.00 and the commission was $500.
31 HHN Ltd. reported net income of $7,000,000 and declared a cash dividend of $2,100,000.
Feb. 15 Received $42,000 from HHN Ltd. as a cash dividend.
Apr. 1 Purchased $400,000 (face value) of bonds at 99 as a long-term investment. The bonds pay 5 percent interest (2.5 percent semiannually) on October 1 and April 1. Sparta Investments Ltd. plans to hold the bonds until maturity in two years. The company chooses to use the straight line method to amortize the discount.
Aug. 31 Received a 10-percent stock dividend from HHN Ltd.
Oct. 1 Received the interest on the bonds.
Nov. 1 HHN Ltd. declared and distributed a 2-for-1 stock split.
Dec. 15 Sold 4,000 shares of HHN Ltd. for $28.00 per share and the commission was $1,500.
31 Recorded the adjustment for accrued interest on the bonds.
31 The fair values of the investments were
Alberta Energy Co ..........................$ 280,000
Finning Ltd ....................................187,000
Canadian National Railway..................290,000
HHN Ltd.......................................288,000
Total short-term investments.............$1,045,000
Required
Prepare the general journal entries required to record the transactions of 2014.