Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bridgeport Corporation made the following cash purchases of securities during 2020, which is the first year in which Bridgeport invested in securities. 1. On January

Bridgeport Corporation made the following cash purchases of securities during 2020, which is the first year in which Bridgeport invested in securities.
1. On January 15, purchased 9,000 shares of Sanchez Companys common stock at $33.50 per share plus commission $1,784.
2. On April 1, purchased 4,500 shares of Vicario Co.s common stock at $52 per share plus commission $3,031.
3. On September 10, purchased 6,300 shares of WTA Co.s preferred stock at $26.50 per share plus commission $4,418.
On May 20, 2020, Bridgeport sold 3,420 shares of Sanchez Companys common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,465. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Bridgeport told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.
Prepare the journal entries to record the above three security purchases. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.

Date

Account Titles and Explanation

Debit

Credit

(1)

Jan. 15, 2020Apr. 1, 2020Sep. 10, 2020

(2)

Jan. 15, 2020Apr. 1, 2020Sep. 10, 2020

(3)

Jan. 15, 2020Apr. 1, 2020Sep. 10, 2020

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Prepare the journal entry for the security sale on May 20. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

May 20, 2020

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Compute the unrealized gains or losses. (Round answer to 0 decimal places, e.g. 2,500.)
Unrealized

LossesGains

$

Prepare the adjusting entries for Bridgeport on December 31, 2020. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 31, 2020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

After The Quality Audit Closing The Loop On The Audit Process

Authors: J. P. Russell, Terry Regel

2nd Edition

0873894863, 978-0873894869

More Books

Students also viewed these Accounting questions