Check my work Hiker Company completes the following transactions during the curr
ID: 2550741 • Letter: C
Question
Check my work Hiker Company completes the following transactions during the current year. May 9 Purchases 320 shares of Higo stock as a short-term investment in available-for-sale securities at a cost of $37 per share plus $198 in broker fees. The broker's commission on this sale is $114. share. June 2 Sells 160 shares of its investment in Higo stock at $40 per share. Dec. 31 The closing market price (fair value) of the Higo stock is $35 per Prepare the May 9 and June 2 journal entries and the December 31 adjusting entry. This is the first and only time the company purchased such securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Explanation / Answer
Journal entry :
Date accounts & explanation debit credit May 9 Equity investment (320*37+198) 12038 Cash 12038 June 2 Cash (160*40-114) 6286 Gain on sale of equity investment 267 Equity investment (12038/2) 6019 Dec 31 Unrealized holding loss on equity investment (160*35-6019) 419 Equity investment 419