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In January 2014, the management of West Company concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During
In January 2014, the management of West Company concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During the year, the following transactions occurred. Feb. 1 Purchased 1,400 shares of ALF common stock for $64,400. Mar. 1 Purchased 860 shares of LNC common stock for $31,560. Apr. 1 Purchased 40 $1,100, 6% CRT bonds for $44,000. Interest is payable semiannually on April 1 and October 1. July 1 Received a cash dividend of $0.80 per share on the ALF common stock. Aug. 1 Sold 400 shares of ALF common stock at S45 per share. Sept. 1 Received $2 per share cash dividend on the LNC common stock. Oct. 1 Received the semiannual interest on the CRT bonds. Oct. 1 Sold the CRT bonds for $49,600. At December 31, the fair values of the ALF and LNC common stocks were S42 and $30 per share, respectively. Your answer is partially correct. Prepare the adjusting entry at December 31, 2014, to report the investments at fair value. All securities are considered to be trading securities
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