Chapter C, Problem 11E

Transactions in held-to-maturity, trading, and stock investments P1 P2 P4 Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year.

1. On February 15, paid $160,000 cash to purchase GMI's 90 -day short-term notes at par, which are dated February 15 and pay $10\%$ interest (classified as held-to-maturity).
2. On March 22, bought 700 shares of Fran Inc. common stock at $51 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran.
3. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part $a.$
4. On July 30, paid $100,000 cash to purchase MP Inc.'s $8\%$ , six-month notes at par, dated July 30 (classified as trading securities).
5. On September 1, received a $1 per share cash dividend on the Fran Inc. common stock purchased in part $b.$
6. On October 8, sold 30 shares of Fran Inc. common stock for $54 cash per share.
7. On October 30, received a check from MP Inc. for three months' interest on the notes purchased in part $d.$