Prepare the appropriate journal entry for each transaction

Assignment Help Accounting Basics

Reference no: EM131969212

Problem

Rantzow-Lear Company buys and sells securities expecting to earn profits on short-term differences in price. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2016 and the first week of 2017.

2016

Dec. 17 Purchased 135,000 Grocers' Supply Corporation preferred shares for $607,500.

28 Received cash dividends of $3,400 from the Grocers' Supply Corporation preferred shares.

31 Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation preferred shares. The market price of the stock was $5 per share.

2017

Jan. 5 Sold the Grocers' Supply Corporation preferred shares for $641,250.

Required:

1. Prepare the appropriate journal entry for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Purchased 135,000 Grocers' Supply Corporation preferred shares for $607,500.

Received cash dividends of $3,400 from the Grocers' Supply Corporation preferred shares.

Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation preferred shares. The market price of the stock was $5 per share.

Sold the Grocers' Supply Corporation preferred shares for $641,250.

Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation preferred shares. The market price of the stock was $5 per share.

2. Indicate any amounts that Rantzow-Lear Company would report in its 2016 balance sheet and income statement as a result of this investment.

Reference no: EM131969212

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