52. (12 points -2 each) The following transactions were made by Allen Company. A

Question

52. (12 points -2 each) The following transactions were made by Allen Company. Assume all investments are short-term and are readily marketable 2 Purchased 400 shares of Snoop Corporation common stock for $45 per share. Purchased 200 Barr Corporation bonds for $228,000. 30 Received a cash dividend of $1.50 per share from Snoop Corporation. 15 31 31 July Sept. Dec. Sold 120 shares of Snoop Corporation stock for $50 per share. Received semiannual interest check for $13,000 from Barr Corporation. Received a cash dividend of $2 per share from Snoop Corporation. Instructions Journalize the transactions. Include dates

Explanation / Answer

Journal entries in the books of Allen Company.

investment in shares a/c Dr
To cash a/c

(Being shares purchased from Snoop corporation@45 per share)

Barr corporation bonds a/c Dr

To cash a/c

(Being 200 Barr corporation bonds issued)

cash a/c Dr

To cash dividend

(Being cash dividend received from Snoop corporation)

cash a/c Dr

To investment in shares a/c

To profit from sale of shares

(Being shares sold for profit)

5400

600

Bank a/c Dr

To interest a/c

(Being interest received from Barr corporation)

cash a/c Dr

To cash dividend

(Being cash dividend received from Snoop corporation)

June,2

investment in shares a/c Dr
To cash a/c

(Being shares purchased from Snoop corporation@45 per share)

18000 18000 July,01

Barr corporation bonds a/c Dr

To cash a/c

(Being 200 Barr corporation bonds issued)

$228000 $228000 July,30

cash a/c Dr

To cash dividend

(Being cash dividend received from Snoop corporation)

600 600 Sep,15

cash a/c Dr

To investment in shares a/c

To profit from sale of shares

(Being shares sold for profit)

6000

5400

600

Dec,31

Bank a/c Dr

To interest a/c

(Being interest received from Barr corporation)

$13000 $13000 Dec,31

cash a/c Dr

To cash dividend

(Being cash dividend received from Snoop corporation)

$560 $560

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