The following securities are in Amberwood Company’s portfolio of long-term available for- sale securities at December 31, 2012.
Cost
1,000 shares of Reginald Corporation common stock....... $52,000
1,400 shares of Elderberry Corporation common stock.......84,000
1,200 shares of Mattoon Corporation preferred stock.......33,600
On December 31, 2012, the total cost of the portfolio equaled total fair value. Amber wood had the following transactions related to the securities during 2013.
Jan. 20 Sold all 1,000 shares of Reginald Corporation common stock at $55 per share less brokerage fees of $600.
28 Purchased 400 shares of $70 par value common stock of Hachito Corporation at $78 per share, plus brokerage fees of $480.
30 Received a cash dividend of $1.15 per share on Elderberry Corp. common stock.
Feb. 8 Received cash dividends of $0.40 per share on Mattoon Corp. preferred stock.
18 Sold all 1,200 shares of Mattoon Corp. preferred stock at $27 per share less brokerage fees of $360.
July 30 Received a cash dividend of $1.00 per share on Elderberry Corp. common stock.
Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Hachito
Corporation at $82 per share, plus brokerage fees of $1,200.
Dec. 1 Received a cash dividend of $1.50 per share on Hachito Corporation common stock.
At December 31, 2013, the fair values of the securities were:
Elderberry Corporation common stock........ $64 per share
Hachito Corporation common stock.......... $72 per share
Instructions
(a) Prepare journal entries to record the transactions.
(b) Post to the investment accounts. (Use T accounts.)
(c) Prepare the adjusting entry at December 31, 2013 to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2013, for the investment-related accounts.