Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method. Investments Cost Fair Value 1,500 shares of Gordon, Inc., common $ 73,500 $ 69,000 5,000 shares of Wallace Corp., common 180,000 175,000 400 shares of Martin, Inc., preferred 60,000 61,600 $313,500 $305,600 All of the securities were purchased in 2020. In 2021, Kenseth completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., common, @ $45 less fees of $1,200. April 1 Bought 700 shares of Earnhart Corp., common, @ $75 plus fees of $1,300. Kenseth's portfolio of equity securities appeared as follows on December 31, 2021. Investments Cost Fair Value 5,000 shares of Wallace Corp., common $180,000 $175,000 700 shares of Earnhart Corp., common 53,800 50,400 400 shares of Martin, Inc., preferred 60,000 58,000 $293,800 $283,400 Instructions Prepare the general journal entries for Kenseth Company for: a. The 2020 adjusting entry. b. The sale of the Gordon stock. c. The purchase of the Earnhart stock. d. The 2021 adjusting entry for the portfolio.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method.

Investments	Cost	Fair Value
1,500 shares of Gordon, Inc., common	$ 73,500	$ 69,000
5,000 shares of Wallace Corp., common	180,000	175,000
400 shares of Martin, Inc., preferred	60,000	61,600
	$313,500	$305,600

All of the securities were purchased in 2020.

In 2021, Kenseth completed the following securities transactions.

March 1	Sold the 1,500 shares of Gordon, Inc., common, @ $45 less fees of $1,200.
April 1	Bought 700 shares of Earnhart Corp., common, @ $75 plus fees of $1,300.

Kenseth's portfolio of equity securities appeared as follows on December 31, 2021.

Investments	Cost	Fair Value
5,000 shares of Wallace Corp., common	$180,000	$175,000
700 shares of Earnhart Corp., common	53,800	50,400
400 shares of Martin, Inc., preferred	60,000	58,000
	$293,800	$283,400

Instructions

Prepare the general journal entries for Kenseth Company for:

a. The 2020 adjusting entry.

b. The sale of the Gordon stock.

c. The purchase of the Earnhart stock.

d. The 2021 adjusting entry for the portfolio.

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