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62. Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year

62. Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows:

1

Name

Number of Shares

Total Cost

Total Fair Value

2

Griffin Inc.

1,480.00

$29,600.00

$32,560.00

3

Luck Company

1,230.00

31,980.00

25,830.00

4

Wilson Company

870.00

31,320.00

28,710.00

5

Total

$92,900.00

$87,100.00

On May 10, Year 2, Gruden Bancorp Inc. purchased 980 shares of Carroll Inc. at $26 per share plus a $120 brokerage commission.

Required:

A. Provide the journal entry to record the adjustment of the trading security portfolio to fair value on December 31, Year 1.*
B. Provide the journal entry to record the May 10, Year 2, purchase of Carroll Inc. stock.*
*Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

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