Prepare entries for trading securities (L.O. 1, 2)

Paris Company acquired on July 15, 1999, 400 shares of Rome Company \(\$ 720\) par value capital stock at \(\$ 698.40\) per share plus a broker's commission of \(\$ 1,728\). On August 1, 1999, Paris Company received a cash dividend of \(\$ 8.64\) per share. On November 3, 1999, it sold 200 of these shares at \(\$ 756\) per share less a broker's commission of \(\$ 1,152\). On December 1 , 1999, Rome Company issued shares comprising a \(100 \%\) stock dividend declared on its capital stock on November 18 .

On December 31, 1999, the end of Paris Company's calendar-year accounting period, the market quotation for Rome Company's common stock was \(\$ 331.20\) per share. The decline was considered to be temporary.

a. Prepare journal entries to record all of these data assuming the securities are considered temporary investments classified as trading securities. Where should the accounts in the last entry appear in the financial statements?

b. Assume Rome Company has become a major customer so the shares are held for longterm affiliation purposes. Indicate how the investment should be shown in the balance sheet.