In January 2006, the management of Match Company concludes that it has sufficient Journalize investment transaccash to permit some short-term investments in debt and stock securities. During the year, the tions, prepare adjusting entry, following transactions occurred. '""' show statement presenta-

Feb. I Purchased 600 shares of Loder common stock for $31,800, plus brokerage fees of

$600.

Mar. 1 Purchased 800 shares of Greer common stock for $20,000, plus brokerage fees of

$400.

Apr. 1 Purchased 50 $1,000. 8% Roy bonds for $50,000. plus $1,000 brokerage fees. Interest is payable semiannually on April 1 and October 1.

July 1 Received a cash dividend of $0.60 per share on the Loder common stock.

Aug. 1 Sold 200 shares of Loder common stock at $57 per share less brokerage fees of $200.

Sept. 1 Received a $1 per share cash dividend on the Greer common stock.

Oct. 1 Received the semiannual interest on the Roy bonds.

Oct. 1 Sold the Roy bonds for $49,000 less $1,000 brokerage fees.

At December 31, the fair value of the Loder common stock was $55 per share. The fair value of the Greer common stock was $23 per share.

Instructions

(a) Journalize the transactions and post to the accounts Debt Investments and Stock Invest-

(a) Gain on stock sale $400 ments. (Use the T-account form.)

(b) Prepare the adjusting entry at December 31, 2006, to report the investment securities at fair value. All securities are considered to be trading securities.

(c) Show the balance sheet presentation of investment securities at December 31, 2006.

(d) Identify the income statement accounts and give the statement classification of each account.