McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date. Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000 Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000 Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000 On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.
McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date.
Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000
Investment Securities 2: Monty, Inc.
Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000
On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000.
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