
Prepare journal entries to record the given transaction and prepare the

Explanation of Solution
Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and equities.
- Credit, all increase in liabilities, revenues, and equities, all decrease in assets, and expenses.
Prepare the journal entries to record the given transactions as follows:
Date | Account Titles and Description | Post Ref. | Debit ($) | Credit ($) |
March 10, 2015 | Short-Term Investments -Company AOL (1) | 143,505 | ||
Cash | 143,505 | |||
(To record the Purchase of 2,400 shares for $59.15 per share alone with a commission of $1,545) | ||||
May 7, 2015 | Short-Term Investments-Company MTV (2) | 184,105 | ||
Cash | 184,105 | |||
(To record the Purchase of 5,000 shares for $36.25 per share alone with a commission of $2,855) | ||||
September 1, 2015 | Short-Term Investments-Company UPS (3) | 69,950 | ||
Cash | 69,950 | |||
((To record the Purchase of 1,200 shares for $57.25 per share alone with a commission of $1,250) | ||||
December 31, 2015 | Unrealized gain | 17,560 | ||
Fair value adjustment-company ST(4) | 17,560 | |||
(To record the fair value of securities) | ||||
April 26, 2016 | Cash (5) | 170,450 | ||
Loss on Sale of Short-Term Investments | 13,655 | |||
Short-Term Investments-Company MTV | 184,105 | |||
(To record the sale of 5,000 shares at $34.50 per share) | ||||
April 27, 2016 | Cash (6) | 70,812 | ||
Gain on Sale of Short-Term Investments | 862 | |||
Short-Term Investments-Company UPS | 69,950 | |||
(To record the sale of 1,200 shares at $60.50 per share) | ||||
June 2, 2016 | Short-Term Investments-Company SPW (7) | 622,450 | ||
Cash | 622,450 | |||
(To record the Purchase of 3,600 shares for $172 per share alone with a commission of $3,250) | ||||
June 14, 2016 | Short-Term Investment-Company W-M (8) | 46,307 | ||
Cash | 46,307 | |||
(To record the Purchase of 900 shares for $50.25 per share alone with a commission of $1,082) | ||||
December 31, 2016 | Fair value adjustment-company ST | 33,298 | ||
Unrealized Gain | 33,298 | |||
(To record the fair value of securities) | ||||
January 28, 2017 | Short-Term Investments -Company P (10) | 88,890 | ||
Cash | 88,890 | |||
(To record the Purchase of 2,000 shares for $43 per share alone with a commission of $2,890) | ||||
January 31, 2017 | Cash (11) | 602,760 | ||
Loss on Sale of Short-Term Investments | 19,690 | |||
Short-Term Investments-Company SPW | 622,450 | |||
(To record the sale of 3,600 shares at $168 per share) | ||||
August 22, 2017 | Cash (12) | 133,720 | ||
Loss on Sale of Short-Term Investments | 9,785 | |||
Short-Term Investments-Company AOL | 143,505 | |||
(To record the sale of 2,400 shares at $56.75 per share) | ||||
September 3, 2017 | Short-Term Investments -Company V (13) | 62,430 | ||
Cash | 62,430 | |||
(To record the Purchase of 1,500 shares for $40.50 per share alone with a commission of $1,680) | ||||
October 9, 2017 | Cash (14) | 47,155 | ||
Gain on Sale of Short-Term Investments | 848 | |||
Short-Term Investments-Company W-M | 46,307 | |||
(To record the sale of 1,800 shares at $18.25 per share) | ||||
December 31, 2017 | Unrealized Loss | 27,058 | ||
Fair value adjustment-company ST (15) | 27,058 | |||
(To record the fair value of securities) |
Table (1)
Working note:
Calculate the purchased value of short-term investment (Company AOL)
Calculate the purchased value of short-term investment (Company MTV)
Calculate the purchased value of short-term investment (Company UPS)
Calculate the fair value adjustment for 2015.
Calculate the value of cash received from the sale of stock investment (Company MTV stocks)
Calculate the value of cash received from the sale of stock investment (Company UPS stocks)
Calculate the purchased value of short-term investment (Company SPM)
Calculate the purchased value of short-term investment (Company W-M)
Calculate the fair value adjustment for 2016.
Calculate the purchased value of short-term investment (Company P)
Calculate the value of cash received from the sale of stock investment (Company SPW stocks)
Calculate the value of cash received from the sale of stock investment (Company AOL stocks)
Calculate the purchased value of short-term investment (Company V)
Calculate the value of cash received from the sale of stock investment (Company W-M stocks)
Calculate the fair value adjustment for 2017.
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Chapter 15 Solutions
Principles of Financial Accounting, Chapters 1-17 - With Access (Looseleaf)
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