At the beginning of the year of 2020, the management of

GOLD

.CO concludes that it has sufficient cash to

permit some short

-

term investments in debt and share securities with 10% to 15%. During the year, the

following transactions occurred are as followed.

Jan 1

Purchased 4

0

0 ordinary shares of

DIAMOND

Co. for $

24

,

0

00.

Feb 5

Purchased

55

0 ordinary shares of

GLOW

for $

44

,000.

June 1

Purchased at face value $1,000,000 of

BLUE

Corp 10 years,

8

% bonds.

Interest is payable semiannually on June 1 and

December 1.

Aug 9

Received a cash dividend of $1,

5

per share on

DIAMOND

Co. ordinary shares.

Sept 6

Sold

15

0 ordinary shares of

DIAMOND

Co. at $7

4

Nov 8

Received a cash dividend of $1,

8

per share on

GLOW

ordinary shares.

Dec 1

Sold $

45

0,000 the

BLUE

Corp bonds at 9

5

.

Dec 1

Received the semiannual interest on

BLUE

Corp. bonds.

At December 31, the fair value of

DIAMOND

. Co ordinary shares was $8

0

per share. The fair value of

GLOW

ordinary shares was $

100

per share.

Instructions

a. Journalize the transactions and post to the accounts Debt investment and share investment. (Use the T

-

account form).

b. Prepare the adjusting entry at Dec 31, 2020, to report the investment securities at fair value. All securities

are con

sidered to be trading securities.