the problem says Holly Company invests its excess cash in marketable securities.
ID: 2347432 • Letter: T
Question
the problem says Holly Company invests its excess cash in marketable securities. At the beginning of 2010 it had the following portfolio of investments in available-for-sale securities:
Security cost 12/31/09 Fair Value
400 Shares of I Company common stock $8,400 $9,400
700 Shares of O Company common stock 23,100 21,700
Totals 31,500 31,100
During 2010, the following transactions occurred:
March 31 Purchased U company 8% bonds with face value of $10,000 for $10,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31
May 17 Sold 200 shares of O Company common stock for $30 per share
June 30 Received the simiannual interest on the U Company bonds
Oct 12 Sold 100 shares of I Company common stock for $24 per share
Dec 31 Received the semiannual interest on the U company bonds and dividends of $1 per share and $1.50 per share on the I and O company common stock, respectively
The December 31 closing market prices were as follows: I company common stock, $25 per share; O company common stock, $31 per share; U company 8% bonds, 101
Prepare journal entries to record the preceding information
Explanation / Answer
No where does it say anything about $31500 or $31100? I don't understand your answer. Also you are leaving out the Unrealized Increase/Decrease in Value of Available for Sale Securities every time the company sold stock..
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