Monty Corporation made the following cash purchases of securities during 2020, which is the first year in which Monty invested in securities. 1. 2. 3. On January 15, purchased 9,200 shares of Sanchez Company's common stock at $33.50 per share plus commission $1,824. On April 1, purchased 4,600 shares of Vicario Co's common stock at $52 per share plus commission $3,098. On September 10, purchased 6,440 shares of WTA Co.'s preferred stock at $26.50 per share plus commission $4,516. On May 20, 2020, Monty sold 3,588 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,542. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Monty told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases. Prepare the journal entry for the security sale on May 20. (Round answers to O decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
Monty Corporation made the following cash purchases of securities during 2020, which is the first year in which Monty invested in securities. 1. 2. 3. On January 15, purchased 9,200 shares of Sanchez Company's common stock at $33.50 per share plus commission $1,824. On April 1, purchased 4,600 shares of Vicario Co's common stock at $52 per share plus commission $3,098. On September 10, purchased 6,440 shares of WTA Co.'s preferred stock at $26.50 per share plus commission $4,516. On May 20, 2020, Monty sold 3,588 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,542. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Monty told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases. Prepare the journal entry for the security sale on May 20. (Round answers to O decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Monty Corporation made the following cash purchases of securities during 2020, which is the first year in which Monty invested in
securities.
1.
2.
3.
On January 15, purchased 9,200 shares of Sanchez Company's common stock at $33.50 per share plus commission $1,824.
On April 1, purchased 4,600 shares of Vicario Co's common stock at $52 per share plus commission $3,098.
On September 10, purchased 6,440 shares of WTA Co's preferred stock at $26.50 per share plus commission $4,516.
On May 20, 2020, Monty sold 3,588 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage
commissions, taxes, and fees of $3,542. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition,
the chief accountant of Monty told you that the corporation plans to hold these securities for the long-term but may sell them in order
to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.
Prepare the journal entry for the security sale on May 20. (Round answers to O decimal places, e.g. 2,500. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter o for the amounts.)
Date
May 20,
2020
Account Titles and Explanation
Cash
Equity Investments
Debit
Credit
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