During certain periods, Yang Company invests its excess cash until it is needed. During 20x6 and 20x7, Yang engaged in these transactions:

20x6 Jan. 16 Invested $146,000 in 120-day U.S. Treasury bills that had a maturity value of $150,000.

Apr. 15 Purchased 10,000 shares of King Tools common stock at $40 per share and 5,000 shares of Mellon Gas common stock at $30 per share as trading securities.

May 16 Received maturity value of U.S. Treasury bills in cash.

June 2 Received dividends of $2.00 per share from King Tools and $1.50 per share from Mellon Gas.

June 30 Made year-end adjusting entry for trading securities. Market price per share for King Tools is $32; for Mellon Gas, it is $35.

Nov. 14 Sold all the shares of King Tools for $42 per share.

20x7 Feb. 15 Purchased 9,000 shares of MKD Communications for $50 per share.

Apr. 1 Invested $195,500 in 120-day U.S. Treasury bills that had a maturity value of $200,000.

June 1 Received dividends of $2.20 per share from Mellon Gas.

30 Made year-end adjusting entry for held-to-maturity securities.

30 Made year-end adjusting entry for trading securities. Market price of Mellon Gas shares is $33 per share and of MKD Communications shares is $60 per share.

Required 1. Prepare entries in journal form to record the preceding transactions, assuming that Yang Company’s fiscal year ends on June 30.

2. Show the balance sheet presentation of short-term investments on June 30, 20x7.

3. User Insight: Explain the following statement: “Held to maturity and trading securities are opposites in terms of investment strategy and thus require opposite accounting treatments.”