Requirement 1. Classify each of the investments made during 2018. (Assume the investments represent less than 20% of ownership of outstanding voting stock)
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Requirement 2. Journalize the 2018 transactions. Explanations are not required. ( record debits first, then credits. Exclude explanations from journal entries. If no entry is required, select No entry required on the first line of the Accounts column and leave the remaing cells blank)
Jul. 2: Purchased 3,000 shares of Micro, Inc common stock at $11.00 per share. Dream plans to sell the stock within three months, when the company will need the cash for normal operations. Dream does not have significant influence over Micro.
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Requirement 3. Prepare T-accounts for the investment assets and show how to report the investments on Dreams balance sheet December 31, 2018.
Begin by preparing T-accounts for the investment asserts that are remaining at December 31,2018. (Select the investment account first, then the fair value adjustment account. If no fair value account is needed, leave that T-account heading and the remaining cells blank.)
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Use the partial balance sheet below to show how to report the investments on Dreams balance sheet at December 31,2018. (If a box is not used in the balance sheet, leave the box empty; do not select a label or enter a zero)
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Requirement 4: the unrealized holding gain (loss) associated with the trading debt investment is included in _________.
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Dream Corporation generated excess cash and invested in securities as follows: (Click the icon to view the transactions) Read the requirements Requirements 1. Classify each of the investments made during 2018. (Assume the equity investments represent less than 20% of ownership of outstanding voting stock.) 2. Journalize the 2018 transactions. Explanations are not required. 3. Prepare T-accounts for the investment assets, and show how to report the investments on Dream's balance sheet at December 31, 2018 4. Where is the unrealized holding gain or loss associated with the trading debt investment reported? Classification Reason Micro stock Tycon bond Classification Reason Micro stock Tycon bond Requirement Available-for-Sale Debt Investment ecord debits first, then credits. Exclude explanations Controlling interest equity investment Jul. 2: Purchas Held-to-Maturity Debt Investment ream plans to sell the stock within three months, whe Date No Significant interest equity investment Debit Credit Significant interest equity investment Trading Debt Investment Jul. 2 Classification Reason ro stock on bond quirement 2. Journalize the 2018 transactions. Explanation 2 Purchased 3,000 shares of Micro, Inc. common stock a Investment will be held to n Intent is to hold for less than a year Intent is to hold for several years. tions from journal entn , when the company w ownerships between 20% and 50% of total oustanding stock. Ownership is greater than 50% of total outstanding stock. ownership is less than 20% of total oustanding stock. Date Accounts Jul 2 Purchased 3,000 shares of Micro, Inc. common stock at $11.00 per share. Dream plans to sell the stock within three months, when the company will need the cash for n Date Accounts Debit Credit Jul. 2 Aug 21: Receved a cash dividend of S0 40 per share on the Micro stock investment Date Accounts Debit Credit Aug 21 Sep 16: Sold the Micro stock for $13 50 per share Date Accounts Debit Credit Sep 16 Oct. 1: Purchased a Tycon bond for $36,000 at face value. Dream classifes the investment as trading and short-term Date Accounts Debit Credit Oct. 1 Dec. 31: Received a $240 interest payment from Tycon. Date Accounts and Explanation Debit Credit Dec. 31 Dec. 31: Adjusted the Tycon bond to its market value of $39,000 Date Accounts Debit Credit Dec. 31 Accounts No entry required Available-for-Sale Debt Investments Cash IV Dividend Revenue ent Equity Investments Fair Value Adjustment-Available-for-Sale Fair Value Adjustment-Equity Investments Fair Value Adjustment-Held-to-Maturity Fair Value Adjustment-Trading Gain on Disposal thi Held-to-Maturity Debt Investments Interest Revenue De Trading Debt Investments Unrealized Holding Gain-Available-for-Sale Unrealized Holding Gain-Equity Investments Unrealized Holding Gain-Held-to-Maturity Unrealized Holding Gain-Trading Unrealized Holding Loss-Available-for-Sale ase Unrealized Holding Loss-Equity Investments stme Unrealized Holding Loss-Held-to-Maturity Unrealized Holding Loss-Trading Del any list or enter any number in the input fields and then continue to th Requirement 3. Prepare T-accounts for the investment assets and show how Begin by preparing T-accounts for the investment assets that are remaining at Requirement 3. Prepare T-accounts for the investment assets and show how to report the investr Begin by preparing T-accounts for the investment assets that are remaining at December 31, 2018 Available-for-Sale Debt Investments Equity Investments Held-to-Maturity Debt Investments Trading Debt Investments Requirement 3. Prepare T-accounts for the investment assets and show how to report the investments on Dream's bala Begin by preparing T-accounts for the investment assets that are remaining at December 31, 2018. (Select the investmer Jul. 2 Sep. 16 Oct. 1 Dec. 31 Use the partial balance sheet below to show how to report the investments on Dream's balance sheet at December 31 Dream Corporation Balance Sheet (Partial) December 31, 2018 Current Assets Long-Term Assets: Accumulated Other Comprehensive Income (Loss) Available-for-Sale Debt Investments (at cost) Available-for-Sale Debt Investments (at fair value) Dividend Revenue Equity Investments Held-to-Maturity Debt Investments Investment Revenue Trading Debt Investments (at cost) Trading Debt Investments (at fair value Unrealized Holding Gain (Loss-Available-for-Sale Unrealized Holding Gain (Loss) Equity Investments Unrealized Holding Gain (Loss)- Held-to-Maturity estments on Dreams balance Unrealized Holding Gain (Loss)-Trading accumulated other comprehensive income section on the balance sheet. balance sheet as a contra account to the trading debt investment account. revenues section of the income statement. other income and (expenses) section on the income statement debt in in the Im
