Carlsville Company, which began operations in 2015, invests its idle cash in tra
ID: 2514485 • Letter: C
Question
Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities.
Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities.(If no entry is required select No journal entry required in the first entry field. Do not round your intermediate calculations.)
1a. Jan 20 - Purchased 800 shares of Ford Motor Co. at $26 per share plus a $125 commission.
1b. Feb 09 - Purchased 2,200 shares of Lucent at $44.25 per share plus a $578 commission.
1c. Oct 12 - Purchased 750 shares of Z-Seven at $7.50 per share plus a $200 commission.
1d. Dec 31 - Record the unrealized gain or loss on short term investment.
1e. Apr 15 - Sold 800 shares of Ford Motor Co. at $29 per share less a $285 commission.
1f. Jul 05 - Sold 750 shares of Z-Seven at $10.25 per share less a $102.50 commission.
1g. Jul 22 - Purchased 1,600 shares of Hunt Corp. at $30 per share plus a $444 commission.
1h. Aug 19 - Purchased 1,800 shares of Donna Karan at $18.25 per share plus a $290 commission.
1i. Dec 31 - Record the unrealized gain or loss on short term investment.
1j. Feb 27 - Purchased 3,400 shares of HCA at $34 per share plus a $420 commission.
1k. Mar 03 - Sold 1,600 shares of Hunt at $25 per share less a $250 commission.
1l. Jun 21 - Sold 2,200 shares of Lucent at $42 per share less a $420 commission.
1m. Jun 30 - Purchased 1,200 shares of Black & Decker at $47.50 per share plus a $595 commission.
1n. Nov 01 - Sold 1,800 shares of Donna Karan at $18.25 per share less a $309 commission.
1o. Dec 31 - Record the unrealized gain or loss on short term investment.
Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities.
Explanation / Answer
Date General Journal Debit Credit 2015 20-Jan Short term investment-Ford company 20925 Cash 20925 800*26+125 09-Feb Short term investment-Ford company 97928 Cash 97928 (2200*44.25)+578 12-Oct Short term investment-Ford company 5825 Cash 5825 (750*7.5)+200 31-Dec Fair Value adjustment-trading 5322 Unrealised Gain 5322 130000-20925-97928-5825 2016 15-Apr Cash Short term investment-Ford company 22915 Gain on short term investment 22915 800*29-285 05-Jul Cash 7585 Short term investment-Z-seven 5825 Gain on short term investment 1760 750*10.25-102.5 22-Jul Short term investment-Hunt 48444 Cash 48444 1600*30+444 19-Aug Short term investment-Donna Karren 33140 Cash 33140 1800*18.25+290 31-Dec Unrealised Loss 47916 Fair value adjustment- trading 47916 160000-22915-7585-48444-33140 2017 27-Feb Short term investment-HCA 116020 Cash 116020 3400*34+420 03-Mar Cash 39750 Loss on sale of Short term investment 8694 Short term investment hunt 48444 1600*25-250 21-Jun Cash 91980 Loss on sale of Short term investment 5948 Short term investment-lucent 97928 2200*42-420 30-Jun Short term investment-Black & Decker 57595 Cash 57595 1200*47.5+595 01-Nov Cash 32541 Loss on sale of Short term investment 599 Short term investment-Donna Karan 33140 1800*18.25-309 31-Dec Unrealized loss 18449 Fair value adjustment- Trading 18449