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Prepare the adjusting entry at december

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Reference no: EM132465790

In January 2017, the management of Kinzie Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.

Feb. 1

  1. Purchased 400 shares of Muninger common stock for $20,000.
  2. Mar. 1 Purchased 600 shares of Tatman common stock for $15,000.
  3. Apr. 1 Purchased 40 $1,090, 5% Yoakem bonds for $43,600. Interest is payable semiannually on April 1 and October 1.
  4. July 1 Received a cash dividend of $0.60 per share on the Muninger common stock.
  5. Aug. 1 Sold 133 shares of Muninger common stock at $60 per share.
  6. Sept. 1 Received a $2 per share cash dividend on the Tatman common stock.
  7. Oct. 1 Received the semiannual interest on the Yoakem bonds.
  8. Oct. 1 Sold the Yoakem bonds for $42,600.

Problem 1: At December 31, the fair value of the Muninger common stock was $51 per share. The fair value of the Tatman common stock was $24 per share.

Question 1: Prepare the adjusting entry at December 31, 2017, to report the investment securities at fair value. All securities are considered to be trading securities.

Reference no: EM132465790

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