Requirement 1. Classify each of the investments made during 2018.

(Assume the investments represent less than20% of ownership of outstanding votingstock.)

Classification Reason

Micro stock No Significant interest equity investment Ownership is less than 20% of total outstanding stock.

Volton bond Trading Debt Investment Intent is to hold for less than a year.

Requirement 2. Journalize the 2018 transactions. Explanations are not required. (Record debitsfirst, then credits. Exclude explanations from journal entries. If no entry isrequired, select"No entryrequired" on the first line of the Accounts column and leave the remaining cellsblank.)

Jul.2: Purchased 3,300 shares of Micro, Inc. common stock at $15.00 per share. Stamp plans to sell the stock within threemonths, when the company will need the cash for normal operations. Stamp does not have significant influence over Micro.

Date Accounts Debit Credit

Jul. 2 Equity Investments 49,500

Cash 49,500

Aug.21: Received a cash dividend of $0.20 per share on the Micro stock investment.

Date Accounts Debit Credit

Aug. 21 Cash 660

Dividend Revenue 660

Sep.16: Sold the Micro stock for $15.50 per share.

Date Accounts Debit Credit

Sep. 16 Cash 51,150

Equity Investments 49,500

Gain on Disposal 1,650

Oct.1: Purchased a Volton bond for $36,000 at face value. Stamp classifies the investment as trading andshort-term.

Date Accounts Debit Credit

Oct. 1 Trading Debt Investments 36,000

Cash 36,000

Dec.31: Received a $300 interest payment from Volton.

Date Accounts and Explanation Debit Credit

Dec. 31 Cash 300

Interest Revenue 300

Dec.31: Adjusted the Volton bond to its market value of $40,000.

Date Accounts Debit Credit

Dec. 31 Fair Value AdjustmentTrading 4,000

Unrealized Holding GainTrading 4,000

Requirement 3. PrepareT-accounts for the investment assets and show how to report the investments on Stamp's balance sheet at December31, 2018.

Begin by preparingT-accounts for the investment assets that are remaining at December31,

20182018.

(Select the investment accountfirst, then the fair value adjustment account. If no fair value account isneeded, leave thatT-account heading and the remaining cellsblank.)