Krogstad Corporation bought 1,000 shares of Cole Inc. for $90 per share plus a b

Question

Krogstad Corporation bought 1,000 shares of Cole Inc. for $90 per share plus a brokerage fee of . $1,800. Three months later, the shares were sold for $110 per share. The brokerage fee on the sale was $2,200.

Required:

(1.) Prepare the appropriate journal entry to record the purchase of the stock.

(2.) Prepare the appropriate journal entry to record the sale of the stock.

Show all work.

Accounts

Debit

Credit

  

Accounts

     

Debit

     

Credit

  

  

     

     

  

  

     

     

  

  

     

     

  

  

     

     

  

  

     

     

  

  

     

     

  

  

     

     

     

     

     

  

Explanation / Answer

Hi,

Please find the answer as follows:

Part 1:

Investments (1000*90 + 1800) Dr. 91800

Cash Cr. 91800

Part 2:

Cash (1000*110 - 2200) Dr. 107800

Investments Cr. 91800

Gain on Sales of Investments (107800 - 91800) Cr. 16000

Thanks

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