Chapter 12, Problem 12.4BE

To determine

Securities:

Securities are the financial term which is issued by the companies in the secondary market to get the long-term or short-term funds.

Journalizing:

It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: The journal entries in the books of Company M.