Problem 4 In its first year of operations, Microsoft Company had the following selected transactions in stock investments. These investments are considered trading securities. 1. June 1 - Purchased for cash 700 shares of Mayflower Corporation common stock at $26 per share. 2. July 1 - Purchased for cash 900 shares of Alexander Corporation common stock at $35 per share. 3. Sept. 1 - Received $2 per share cash dividend from Alexander Corporation. 4. Nov. 1 - Sold 400 shares of Mayflower common stock for cash at $30 per share. 5. Dec. 15 - Received a $0.75 per share cash dividend on Mayflower common stock. At December 31, the fair values per hare were Mayflower Corporation $27 and Alexander Corporation $33.

a) Journalize the transactions.

b) Prepare the adjusting entry at December 31 to report the securities at fair value.