7. During January 2014, Aerogem purchased the following securities Security Clas

Question

7. During January 2014, Aerogem purchased the following securities Security Classification # of Shares Total Cost Gimli Corporation stock Trading            500 $      9,000 Legolas International Inc stock Available for sale         1,000 $     22,000 Glorfindel Enterprises stock Available for sale         2,500 $     42,500 Mirkwood Co bonds Held to maturity $     24,000 U.S. Treasury bonds Trading $     11,000 During 2014, Aerogem received interest from Mirkwood and the U.S. Treasury totaling $3,630. Dividends received on the stock held amounted to $1,760. During November 2014, Aerogem sold 200 shares of the Gimli stock at $17 per share and 250 shares of the Glorfindel stock at $19 per share. Give the journal entries required by Aerogem to record the (1) purchase of the debt and equity securities; (2) receipt of interest and dividends during 2014, and (3) sale of the equity securities during November. Gains and Losses s/b recorded in seperate accounts. Debit Credit 1) Purchase of the securities 2) Receipt of interest and dividends 3) Sale of securities 7. During January 2014, Aerogem purchased the following securities Security Classification # of Shares Total Cost Gimli Corporation stock Trading            500 $      9,000 Legolas International Inc stock Available for sale         1,000 $     22,000 Glorfindel Enterprises stock Available for sale         2,500 $     42,500 Mirkwood Co bonds Held to maturity $     24,000 U.S. Treasury bonds Trading $     11,000 During 2014, Aerogem received interest from Mirkwood and the U.S. Treasury totaling $3,630. Dividends received on the stock held amounted to $1,760. During November 2014, Aerogem sold 200 shares of the Gimli stock at $17 per share and 250 shares of the Glorfindel stock at $19 per share. Give the journal entries required by Aerogem to record the (1) purchase of the debt and equity securities; (2) receipt of interest and dividends during 2014, and (3) sale of the equity securities during November. Gains and Losses s/b recorded in seperate accounts. Debit Credit 1) Purchase of the securities 2) Receipt of interest and dividends 3) Sale of securities

Explanation / Answer

1)Purchase of the Securities

2) receipt of interest and dividends during 2014

3) sale of the equity securities during November. Gains and Losses s/b recorded in seperate accounts

Account Title & Explanation Debit Credit Cash 9000 Investment in Gimli Corporation stock 9000 Cash 22000 Investment in Legolas International Inc stock 22000 Cash 42500 Investment in Glorfindel Enterprises stock 42500 Cash 24000 Investment in Mirkwood Co bonds 24000 Cash 11000 Investment in U.S. Treasury bonds 11000

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