Jets Bancorp Inc. purchased a portfolio of trading securities during 2016. The c

Question

Jets Bancorp Inc. purchased a portfolio of trading securities during 2016. The cost and fair value of this portfolio on December 31, 2016, was as follows:

On May 10, 2017, Jets Bancorp Inc. purchased 990 shares of Giants Inc. at $26 per share plus a $130 brokerage commission.

Required:

A. Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles and be sure to enter the year as part of the date): The adjustment of the trading security portfolio to fair value on December 31, 2016. The May 10, 2017, purchase of Giants Inc. stock. Number of Name Total Cost Total Fair Value Shares 1460.00 $292000 Dolphins Inc. Marino Company Namath Company Total 30,000.00 30,600.00 $89,800.00 32,120.00 26,400.00 26,350.00 84,870.00 1,200.00 850.00

Explanation / Answer

Journal Entries: DR IN $ CR IN $ 31-Dec Loss on Valuation of Investment Dr. 7850 Investment (Shares in marino Company) Cr. 3600 Investment(Shares in Namath Company) Cr. 4250 (Valued at cost or Fair value, whichever is less) 10-May Investment (Shares in Giants INC) 25870 Cash Acount Cr. 25870 (Being shares in Giants Inc purchased 990 shares @26 plus Brokerage)

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