Need help with this journal entry Amalgamated General Corporation is a consultin
ID: 2607928 • Letter: N
Question
Need help with this journal entry
Amalgamated General Corporation is a consulting firm that also offers financlal services through Its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated's Investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $45 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held In Amalgamated's trading portfollo. The company's fiscal year ends on December 31. 2018 Oct. 18 Purchased 2 million preferred shares of Millwork ventures Company for $59 million 31 Received semiannual interest of $1.8 million from the Kansas Abstractors bonds Nov. 1 Purchased 18% bonds of Holistic Entertainment Enterprises at their $108 million face value, to be held until they mature in 2025. Semiannual interest is payable April 3e and October 31 1 Sold the Kansas Abstractors bonds for $41 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously. Dec. 1 Purchased 12% bonds of Household Plastics Corporation at their $80 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30 20 Purchased U. S. Treasury bonds for $7.3 million as trading securities, hoping to earn profits on short-term differences in prices 21 Purchased 4 million common shares of NXS Corporation for $50 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale 23 Sold the Treasury bonds for $7.7 million 29 Received cash dividends of $3 million from the Millwork ventures Company preferred shares. 31 Recorded any necessary adjusting entry (s) and closing entries relating to the investments. The market price of the Millwork ventures Company preferred stock was $28.50 per share and $14.5e per share for the NXS Corporation common. The fair values of the bond investments were $57.6 million for Household Plastics Corporation and $18.4 million for Holistic Entertainment Enterprises 2019 Jan. 7 Sold the NXS Corporation common shares for $46 millionExplanation / Answer
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Date
Account Name Debit($ in millions) Credit($ in millions) Oct,18 Investment in Preference shares of Millwork ventures 59 Cash 59 Oct,31 Cash 1.8 Investment Revenue 1.8 Nov,1 Investment in Holistic entertainment Bonds 108 Cash 108 Nov,1 Cash 41 Loss on sale of Investment 4 Investments in Kanas bonds 45 Dec,01 Investment in 12% Household Plastic bonds 80 Cash 80 Dec,20 Investment in US Treasury Bonds 7.3 Cash 7.3 Dec,21 Investment in NXS Common shares 50 Cash 50 Dec,23 Cash 7.7 Investment US Treasury Bonds 7.3 Gain on sale of Investment 0.4 Dec,29 Cash 3 Dividends on preffered stock 3 Dec,31 Decrease in value of investment MV company due to market fluctuation 7 Investment in MV company -preferred stock 7 Dec,31 Investment in NXS company 8 Increase in value of investment NXS corp - common stock 8 Dec,31 Investment in HP Corp Bonds 12% 9.7 Increase in value of HP Corp Bonds 12% 9.7 Dec,31 Decrease in value of investment in HE Enterprise bonds 10% 1.1 Investment in HE Enterprise 1.1 7-Jan Cash 46 Loss on sale 4 Investment in NXS 50