1. Armonico Capital Partners, Ltd acquired the following equity investments at the beginning of 2017 to be held in a trading portfolio:

Description

Anderson Brothers

Daimler Company

Number of shares $15,500

$15,500

$20,000

Market price per share

X $25

X $18

Share acquisition price

$387,500

$360,000

Share prices at the end of years 2017 and 2018 are presented below:

Fair Value

Anderson Brothers

Daimler Company

End of year 2017

$19

$22

End of year 2018

$23

$28

Required

a.Prepare the journal entry to record the acquisition of the investments (3 points)

b.Prepare the journal entry to record the end of year 2017 adjusting entry (4 points)

c.Assume that Armonico sells 15,000 Daimler Company shares for $16 per share at the beginning of 2018. Prepare the journal entry required to record the sale. Armonico does not correct the fair value adjustment account at this time. (9 points)

d. Prepare the journal entry to record the end of year 2018 adjusting entry (10 points)