The following securities are in Pascual SAs portfolio of long-term non-trading securities at December 31, 2019. Cost

Question:

The following securities are in Pascual SA’s portfolio of long-term non-trading securities at December 31, 2019.

Cost
1,000 shares of Reginald SA ordinary shares ....................................R$52,000
1,400 shares of Elderberry A/S ordinary shares ....................................84,000
1,200 shares of Mattoon AG preference shares ....................................33,600

On December 31, 2019, the total cost of the portfolio equaled total fair value. Pascual had the following transactions related to the securities during 2020.

Jan. 20 Sold all 1,000 ordinary shares of Reginald at R$54.80 per share.
28 Purchased 400 R$70 par value ordinary shares of Hachito Ltd. at R$79.20 per share.
30 Received a cash dividend of R$1.05 per share on Elderberry ordinary shares.
Feb. 8 Received cash dividends of R$0.40 per share on Mattoon preference shares.
18 Sold all 1,200 preference shares of Mattoon at R$26.30 per share.
July 30 Received a cash dividend of R$1.00 per share on Elderberry ordinary shares.
Sept. 6 Purchased an additional 600 R$70 par value ordinary shares of Hachito at R$82 per share.
Dec. 1 Received a cash dividend of R$1.35 per share on Hachito ordinary shares.
At December 31, 2020, the fair values of the securities were:

Elderberry A/S ordinary shares .............................R$64 per share
Hachito Ltd. ordinary shares ..................................R$72 per share

Instructions
a. Prepare journal entries to record the transactions.
b. Post to the investment account. (Use T-account.)
c. Prepare the adjusting entry at December 31, 2020 to report the portfolio at fair value. Also prepare the required closing entry related to the investment securities.
d. Show the statement of financial position presentation at December 31, 2020, for the investment related accounts.

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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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