Problem D-1A Account for investments using the fair value method (LO2)

Barry, Hank, and Babe form a company named Long Ball Investments, hoping to find that elusive home run stock. A new clothing company by the name of Major League Apparel has caught their eye. Major League Apparel has two classes of stock authorized: 5%, $10 par preferred and $1 par value common. Long Ball Investments has the following transactions during the year. None of the investments are large enough to exert a significant influence. Assume that the securities are available-for-sale securities.

January 2		Purchase 1,500 shares of Major League common stock for $70 per share.
February14		Purchase 600 shares of Major League preferred stock for $12 per share.
May 15		Sell 300 shares of Major Leagues common stock for $62 per share.
December 30		Receive a cash dividend on Major Leagues common stock of $0.50 per share and preferred stock of $0.50 per share.
December 31		The fair values of the common and preferred shares are $73 and $14, respectively.

Required:

1.

Record each of these investment transactions. (Hint: Preferred stock transactions are recorded like common stock transactions, but preferred stock has no voting rights and therefore ownership provides no influence.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)