date. (Assume the last allfeady been recorded.) P15-194 Classifying and accounting for debt and equity investments Jetway Corporation generated excess cash and invested in securities as follows: Learning Objectives 1, 2, 3, 4 2018 2. Sep 16 Gain on Disposal CR $5,880 Jul. 2 Purchased 4,200 shares of Pogo, Inc. common stock at $12.00 per share. Jetway plans to sell the stock within three months, when the company will need the cash for normal operations. Jetway does not have significant influence over Pogo. Aug. 21 Received a cash dividend of $0.80 per share on the Pogo stock investment Sep. 16 Sold the Pogo stock for $13.40 per share. Oct. 1 Purchased a Violet bond for $20,000 at face value. Jetway classifies the investment as trading and short-term. Dec. 31 Received a $100 interest payment from Violet 31 Adjusted the Violet bond to its market value of $22,000 Requirements 1. Classify each of the investments made during 2018. (Assume the equity invest- ments represent less than 20% of ownership of outstanding voting stock.) 2. Journalize the 2018 transactions. Explanations are not required. 3. Prepare T-accounts for the investment assets, and show how to report the invest ments on Jetway's balance sheet at December 31, 2018 4. Where is the unrealized holding gain or loss associated with the trading debt investment reported? Learning Objectives 3, 4 H M PELA N Requirements 1. Classify each of the investments made during 2018. (Assume the investments represent less than 20% of ownership of outstanding voting stock.) 2. Journize the 2018 transactions. Explanations are not required. 3. Prepare T-accounts for the investment assets, and show how to report the investments on Jetway's balance sheet at December 31, 2018 Where is the unrealized holding gain or loss associated with the trading debt investment reported? 14 15 Solution: 12 Requirement 1 18 20 21 Page 1 Requirement 2 Date Accounts and Explanation Debit Credit 45 Date Account and Explanation Det Creat 50 E15-10 E15-11 E15-12 E15-13 E16-14 E15-16 E15-1 Paste B a. Av A fx P15-19A D G H Calculations: N RRE 01 71 72 73 7 75 77 78 79 00 81 Page 2 Requirement 3 Equity Investment Fair Value Adustment Trading Trading Debt Investments JETWAY CORPORATION Balance Sheet (Partial) December 31, 2018 Current Assets 100 101 Requirement 4 100 104 105 100 E15-10 E15-11 E15-12 E15-13 E15-14 E15-16