On July 1, 2018, Wolfpack Corporation purchased securities which it intends to b

Question

On July 1, 2018, Wolfpack Corporation purchased securities which it intends to buy and sell frequently. These securities consisted of (a) Todd Corporation 10%, 5-year bonds with a face value of $20,000 which were purchased for $18,500 and (b) 300 shares of Cornett Company common stock which were purchased at $40 per share.

Required:

Entry (2 Accounts):

Entry (2 Accounts):

Prepare the July 1 journal entry to record the purchase of these trading securities. Refer to the Chart of Accounts for exact wording of account titles.

Explanation / Answer

Working note : Value of Trading securities purchased

Journal Entry

Todd Corporation 10%, 5-year bonds $18,500 Shares of Cornett Company common stock ( 300 * $40) $12,000 Total $30,500

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