Barzetti had no investments prior to the current year. It had the following transactions involving available-for-sale and held-to-maturity securities during the year. The stock purchases are considered short-term, non-influential securities. Prepare Barzetti's journal entries to record the transactions and events associated with the investment purchases.Apr. 18Purchased 5,000 shares of Lacy Co. stock at $26.50 per share plus a $350 brokerage fee.May 01Purchased $200,000 of Butcher's 7%, two-year bonds payable at par value. Interest payments are paid semiannually on November 1 and May 1. It is the company's intent to hold the bonds until maturity.Jun. 10Purchased 4,000 shares of SubCo stock at $48.25 plus a $325 brokerage fee.Nov. 01Received a check for the first semiannual interest
payment on the Butcher's bonds.Nov. 15Received a $0.65 per share cash dividend on the Lacy Co. shares.Nov. 30Sold 2,000 shares of Lacy Co. stock at $29 less a $300 brokerage fee.Dec. 15Received a $1.10 per share cash dividend on the SubCo shares.Dec. 20Received a $.075 per share cash dividend on the remaining Lacy Co. shares.Dec. 31Prepare an adjusting entry to record the fair value adjustment on the equity securities. At December 31, the Lacy Co. stock has a fair value of $28 per share, and the SubCo stock has a fair value of $49.50 per share.
What will be an ideal response?
| Apr. 18 | Stock Investments (ST) | 132,850 | ? |
| ? | Cash [(5,000 * $26.50) + $350] | ? | 132,850 |
| ? | ? | ? | ? |
| May 01 | Debt Investments-HTM | 200,000 | ? |
| ? | Cash | ? | 200,000 |
| ? | ? | ? | ? |
| Jun. 10 | Stock Investments (ST) | 193,325 | ? |
| ? | Cash [(4,000 * $48.25) + $325] | ? | 193,325 |
| ? | ? | ? | ? |
| Nov. 01 | Cash (200,000 * .07 * 1/2) | 7,000 | ? |
| ? | Interest Revenue | ? | 7,000 |
| ? | ? | ? | ? |
| Nov. 15 | Cash (5,000 * $0.65) | 3,250 | ? |
| ? | Dividend Revenue | ? | 3,250 |
| ? | ? | ? | ? |
| Nov. 30 | Cash [(2,000 * $29) ? $300] | 57,700 | ? |
| ? | Stock Investments (ST) ($132,850 * 2/5) | ? | 53,140 |
| ? | Gain on Sale of Short-Term Stock Investments | ? | 4,560 |
| ? | ? | ? | ? |
| Dec. 15 | Cash (4,000 * $1.10) | 4,400 | ? |
| ? | Dividend Revenue | ? | 4,400 |
| ? | ? | ? | ? |
| Dec. 20 | Cash (3,000 * $0.75) | 2,250 | ? |
| ? | Dividend Revenue | ? | 2,250 |
| ? | ? | ? | ? |
| Dec. 31 | Fair value Adjustment-Stocks | 8,965 | ? |
| ? | Unrealized Gain-Income | ? | 8,965 |
| ? | ? | Fair | Holding gain | ? |
| ? | Cost | Value | (loss) | ? |
| Lacy | $79,710 | $84,000 | $4,290 | ? |
| SubCo | 193,325 | 198,000 | 4,675 | ? |
| Total | $273,035 | $282,000 | $8,965 | ? |
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