Mire Corporation had the following transactions involving investments in non-influential securities during the year. Prior to these transactions, Mire had never had any investments in securities. Prepare the required general journal entries to record these transactions.Feb. 16Purchased 800 shares of HM Corporation stock at $28 per share plus a $400 brokerage fee.Feb. 26Purchased 500 shares of Sugarland Co. stock at $19 per share plus a $300 brokerage fee.Mar. 2Received a $0.95 per share dividend from the HM Corporation.Mar. 28Sold 200 shares of HM Corporation stock for $31 per share less a $150 brokerage fee.Apr. 20Sold 150 shares of Sugarland Co. stock at $17 per share less a $100 brokerage fee.Apr. 30The company is preparing quarterly financial statements; prepare an adjusting entry for
the fair value adjustment on the trading securities. At April 30, the HM stock has a fair value of $30 per share, and the Sugarland stock has a fair value of $16 per share.
What will be an ideal response?
| Feb. 16 | Stock Investments | 22,800 | ? |
| ? | Cash [(800 * $28) + $400] | ? | 22,800 |
| ? | ? | ? | ? |
| Feb. 26 | Stock Investments | 9,800 | ? |
| ? | Cash [(500 * $19) + $300] | ? | 9,800 |
| ? | ? | ? | ? |
| Mar. 2 | Cash (800 * $0.95) | 760 | ? |
| ? | Dividend Revenue | ? | 760 |
| ? | ? | ? | ? |
| Mar. 28 | Cash [(200 * $31) ? $150] | 6,050 | ? |
| ? | Stock Investments | ? | 5,700 |
| ? | Gain on Sale of Short-Term Investments | ? | 350 |
| ? | ? | ? | ? |
| ? | Stock Investments = $22,800/4 = $5,700 | ? | ? |
| ? | Gain on sale = $6,050 ? $5,700 = $350 | ? | ? |
| ? | ? | ? | ? |
| Apr. 20 | Cash [(150 * $17) ? $100] | 2,450 | ? |
| ? | Loss on Sale of Stock Investments | 490 | ? |
| ? | Stock Investments | ? | 2,940 |
| ? | ? | ? | ? |
| ? | Stock investment = $9,800 * (150/500) = $2,940 | ? | ? |
| ? | Loss on sale = $2,940 ? $2,450 = $490 | ? | ? |
| ? | ? | ? | ? |
| Apr. 30 | Unrealized Loss-Income | 360 | ? |
| ? | Fair value Adjustment-Stock | ? | 360 |
| Investment | Cost | Fair Value |
| HM | $22,800 ? $5,700 = $17,100 | 600 * $30 = $18,000 |
| Sugarland | $ 9,800 ? $2,940 = 6,860 | 350 * $16 = 5,600 |
| Totals | $23,960 | $23,600 |
| Unrealized loss = $23,960 ? $23,600 = $360 |
Business
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