Exercise 15-2 Accounting for short-term trading securities LO P1 Prepare journal

Question

Exercise 15-2 Accounting for short-term trading securities LO P1 Prepare journal entries to record the following transactions involving the short-term securities occurred during year 2017 investments of Duke Co., all of which purchased 730 shares of RIP Company stock at $17 per share plus a(n) $150 brokerage fee. These shares are b. c. On October 8, sold 365 shares of RIP Co. stock for $27 per share, less afn) $140 brokerage fee. categorized as trading securities On September 1, received a $3 per share cash dividend on the RIP Company stock purchased in transaction a

Explanation / Answer

22-Mar Short­Term Investments—Trading (RIP) 12560 =(730*17)+150            Cash 12560 1-Sep Cash 2190 =730*3        Dividend revenue 2190 8-Oct Cash 9715 =(365*27)-140           Short­term investments—Trading (RIP) 6280 =12560/730*365          Gain on sale of short­term investments 3435

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