On

FebruaryFebruary

1,

20162016,

GrayGray

Co. decides to invest excess cash of

$ 18 comma 000$18,000

by purchasing

900900

shares of

PaynePayne,

Inc. stock at

$ 20$20

per share. At year-end, December 31,

20162016,

PaynePayne's

market price was

$ 21$21

per share. The investment is categorized as a trading investment.

Requirements

1.	Journalize the transactions for GrayGray's investment in PaynePayne, Inc. for 20162016.
2.	In what category and at what value would GrayGray report the asset on the December 31, 20162016, balance sheet? In what account would the market price change in PaynePayne's stock be reported, if at all?
3.	What was the net effect of the investment on GrayGray's net income for the year ended December 31, 2016?