Question
SageCompany has the following securities in its investment portfolio on December 31, 2020 (all securities were purchased in 2020): (1)2,800shares of Anderson Co. common stock
SageCompany has the following securities in its investment portfolio on December 31, 2020 (all securities were purchased in 2020): (1)2,800shares of Anderson Co. common stock which cost $53,200, (2)10,700shares of Munter Ltd. common stock which cost $599,200, and (3)6,000shares of King Company preferred stock which cost $258,000. The Fair Value Adjustment account shows a credit of $10,100at the end of 2020.
In 2021, Sage completed the following securities transactions.
1.On January 15, sold2,800shares of Anderson's common stock at $23per share less fees of $2,040.2.On April 17, purchased1,000shares of Castle's common stock at $34per share plus fees of $1,960.
On December 31, 2021, the market prices per share of these securities were Munter $62, King $40, and Castle $23. In addition, the accounting supervisor of Sage told you that, even though all these securities have readily determinable fair values, Sage will not actively trade these securities because the top management intends to hold them for more than one year.
(a)
the entry for the security sale on January 15, 2021
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