e http://ezto.mheducation.com/hm.tp , cl e Exam, 3 Chapters 10-13 . connect.. AC
ID: 2596714 • Letter: E
Question
e http://ezto.mheducation.com/hm.tp , cl e Exam, 3 Chapters 10-13 . connect.. ACCOUNTING am 3 Chapters 10-13 Appendix D [The following information applies to the questions displayed below] On August 4, 2014, Cable Corporation purchased 2,600 shares of Satre Company for $98,800. The following information applies to the fair value of Satre Company 12/31/2014 12/31/2015 12/31/2016 Per Share $ 50 42 34 Satre Company declares and pays cash dividends of $4 per share on June 1 of each year Required: 1. Prepare journal entries to record the facts in the case, assuming that Cappio considers the shares to be available-for-sale securities TIP: Net unrealized losses/gains on available-for-sale securities are reported in stockholders' equity. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction listExplanation / Answer
Date
Particulars
Debit
Credit
Aug 4, 2014
Satre Company Securities A/c Dr.
$98,800
To Cash A/c
$98,800
Dec 31,2014
Satre Company Securities A/c Dr.
$31,200
To Unrealized gain on securities
$31,200
Gain = 2600shares*($50-$38)
Jun 1, 2015
Cash A/c Dr. ($4*2,600shares)
$10,400
To Dividend Income A/c
$10,400
Dec 31, 2015
Unrealized loss on securities A/c Dr.
$20,800
To Satre Company Securities A/c
$20,800
loss = 2600shares*($50-$42)
Jun 1, 2016
Cash A/c Dr.
$10,400
To Dividend Income
$10,400
Dec 31, 2016
Unrealized loss on securities a/c Dr.
$10,400
To Satre Company securities A/c
$10,400
loss = 2600shares*($42-$34)
Date
Particulars
Debit
Credit
Aug 4, 2014
Satre Company Securities A/c Dr.
$98,800
To Cash A/c
$98,800
Dec 31,2014
Satre Company Securities A/c Dr.
$31,200
To Unrealized gain on securities
$31,200
Gain = 2600shares*($50-$38)
Jun 1, 2015
Cash A/c Dr. ($4*2,600shares)
$10,400
To Dividend Income A/c
$10,400
Dec 31, 2015
Unrealized loss on securities A/c Dr.
$20,800
To Satre Company Securities A/c
$20,800
loss = 2600shares*($50-$42)
Jun 1, 2016
Cash A/c Dr.
$10,400
To Dividend Income
$10,400
Dec 31, 2016
Unrealized loss on securities a/c Dr.
$10,400
To Satre Company securities A/c
$10,400
loss = 2600shares*($42-$34)
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