M&JB Investment Corp. (with a 12/31 year-end) began operations on 1/1/X1 by issuing 10,000 shares of $5 par value common stock to 5 shareholders. Each shareholder paid $40,000 for their 2,000 shares. M&JB uses straight-line amortization for bond investments, all of which paid annual interest when due on 12/31. Use first three, next two, and last four digits of your identification number for AAA, BB, and CCCC, respectively. Ignore income taxes. Round each transaction to the nearest dollar.

The following transactions took place:

20X1:

Jan. 1 Record the initial investment by the owners described above.

Bought the following Available-for-Sale (AFS) securities:

200 shares of ABC Co. common stock for $ 24 per share.

100 shares of DEF Co. common stock for $ 16 per share.

300 shares of GHI Co. common stock for $20 per share.

Jan. 1 Bought the following Held-to-Maturity securities:

30 bonds of PQR Co. for $938.00 per $1,000 bond.

100 bonds of STU Co. for $1,068.45 per $1,000 bond.

Feb. 2 Bought the following Trading Securities:

300 shares of JKL Co. common stock for $19 per share.

150 shares of MNO common stock for $18 per share.

Aug 3 Sold 200 shares of JKL Co. stock for $26.38 per share.

Bought 100 shares of VWX Co. common stock for $32 per share, classified as AFS Securities.

Sold 300 shares of GHI Co. stock for $21.51 per share.

Dec 15 Received cash dividends from common stock investments for 20X1

Dec 31 Investment expenses of $1,151 were paid in cash for the year

Received interest on bond investments, and made necessary amortizations

Made all necessary fair market value adjustments

Made all necessary closing entries

20X2:

Jan. 1 Issued 100 shares of $100 par value, 8%, cumulative Preferred Stock for $16,845. The Preferred Stock is convertible into common stock, 5 shares of common for each share of preferred.

Jan. 2 Bought 300 shares of RJB Co. common stock for $50 per share. Significant influence was achieved. Assume FVO was not elected.

Apr 2 Sold 100 shares of JKL Co. stock for $31.51 per share

Bought 150 more shares of MNO Co. common stock for $15 per share

Jul 1 Bought 300 shares of XYZ Co. common stock for $60.151 per share; classified as a trading security.

Sold 100 shares of DEF Co. stock for $18.38 per share

Nov1 Declared cash dividends to our shareholders of $1.38 per common share and $8 per preferred share.

Nov 15 Paid dividends declared on Nov. 1

Dec 15 Received cash dividends from common stock investments for 20X2

Dec 31 Investment expenses of $6,845 were paid in cash for the year

Received interest on bond investments, and made necessary amortizations

Made all necessary fair market value adjustments

Made all necessary closing entries

Required:

Prepare general journal entries to record the above transactions. Use Excel.

Prepare comparative financial statements for the two years. Include an Income Statement (including BEPS and DEPS - show your computations), a Statement of Shareholder Equity, and a Balance Sheet. Use Excel or other spreadsheet software.

Schedule A Common Stocks

Company Name Shares O/S Dividends per Share FMV per share at:

20X1 20X2 20X1 20X2

ABC Co. 2,000 3.38 3.38 24.38 30.38

DEF Co. 3,000 4.38 4.38 14.38 16.38

JKL Co. 9,000 1.38 1.38 24.38 -

MNO Co. 8,000 2.38 2.38 16.38 15.38

VWX Co. 4,000 5.38 5.38 29.38 31.38

RJB Co. 1,000 21.51 21.51 - 90.38

XYZ Co. 7,000 6.38 6.38 - 59.38

Company Name Reported Earning for:

20X1 20X2

RJB Co. 40,000 46,845

Schedule B Bonds

All investment bonds pay interest annually on December 31

Company Name Stated Interest Rate Maturity Date

PQR Co. 7.00 % 12/31/20X8

STU Co. 8.25 % 12/31/20X9