Prepare journal entries to record the preceding information

Reference no: EM131779942

Question: At the end of 2015, Terry Company prepared the following schedule of investments in available-for-sale securities (common stock):

Company	Cost	12/31/15 Fair Value	Cumulative Change in Fair Value
Morgan Company	$37,000	$34,200	$(2,800)
Nance Company	42,000	43,100	1,100
Totals	$79,000	$77,300	$(1,700)

During 2016, the following transactions occurred:

June 8	Purchased Oscar Company common stock for $50,000.
Oct. 11	Sold all of the Morgan Company securities for $35,400.
Dec. 31	Received dividends of $900 on the Nance Company and Oscar Company securities, and the following year-end total market values were available: Nance Company common stock, $43,900; Oscar Company common stock, $49,600.

Required: 1. Prepare journal entries to record the preceding information.

2. Show how the preceding items are reported on Terry's December 31, 2016, balance sheet. Assume all investments are noncurrent.

Reference no: EM131779942

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