On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV‑NI. Kelly Corporation 800 shares of common stock (no-par) at $60 per share Keefe Corporation 480 shares preferred stock ($10 par) at $20 per share On December 31, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24.
On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FV‑NI.
| Kelly Corporation | 800 | shares of common stock (no-par) at $60 per share |
| Keefe Corporation | 480 | shares |
On December 31, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24.
Following are the data for the following year (Year 2).
Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.
Oct. 01: Sold 160 shares of Keefe Corporation preferred stock at $25 per share.
Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share.
- Year 1
- Year 2
d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on December 31, Year 2.
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