Question
Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method. Investments
Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method.
Investments | Cost | Fair Value | ||
1,500 shares of Gordon, Inc., Common | $73,500 | $69,000 | ||
5,000 shares of Wallace Corp., Common | 180,000 | 175,000 | ||
400 shares of Martin, Inc., Preferred | 60,000 | 61,600 | ||
$313,500 | $305,600 |
All of the securities were purchased in 2020. In 2021, Kenseth completed the following securities transactions.
March 1 | Sold the 1,500 shares of Gordon, Inc., Common, @ $45 less fees of $1,200. | |
April 1 | Bought 700 shares of Earnhart Corp., Common, @ $75 plus fees of $1,300. |
Kenseths portfolio of equity securities appeared as follows on December 31, 2021.
Investments | Cost | Fair Value | ||
5,000 shares of Wallace Corp., Common | $180,000 | $175,000 | ||
700 shares of Earnhart Corp., Common | 53,800 | 50,400 | ||
400 shares of Martin, Inc., Preferred | 60,000 | 58,000 | ||
$293,800 | $283,400 |
Prepare the general journal entries for Kenseth Company for:
(a) | The 2020 adjusting entry. | |
(b) | The sale of the Gordon stock. | |
(c) | The purchase of the Earnhart stock. | |
(d) | The 2021 adjusting entry for the trading portfolio. |
(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. | Account Titles and Explanation | Debit | Credit |
(a) | |||
(b) | |||
(c) | |||
(d) | |||
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