Prepare journal entries to record the following transactions involving the short

Question

Prepare journal entries to record the following transactions involving the short-term securities investments of Duke Co., all of which occurred during year 2017 a. On March 22, purchased 880 shares of RIP Company stock at $26 per share plus a(n) $340 brokerage fee. These shares are categorized as trading securities. b. On September 1, received a $3 per share cash dividend on the RIP Company stock purchased in transaction a On October 8, sold 440 shares of RIP Co. stock for $36 per share, less a(n) $330 brokerage fee. View transaction list Journal entry worksheet 2 3 On March 22, purchased 880 shares of RIP Company stock at $26 per share plus a(n) $340 brokerage fee. These shares are categorized as trading securities. Note: Enter debits before credits. Transaction General Journal Debit Credit a.

Explanation / Answer

Transaction General Journal Debit Credit a. Short­Term Investments—Trading (RIP)[(880 × $26) + $340 ] $23,220 Cash $23,220 b. Cash(880 × $3.00) $2,640 Dividend revenue $2,640 c. Cash[(440 × $36) – $330] $15,510 Short­term investments—Trading (RIP)($23,220/2) $11,610 Gain on sale of short­term investments $3,900

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