Reference no: EM132838989
Problem - Stellar Company has the following portfolio of investment securities at September 30, 2020, its most recent reporting date.
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Investment Securities
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Cost
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Fair Value
|
|
Horton, Inc. common (5,180 shares)
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$217,560
|
$204,010
|
|
Monty, Inc. preferred (3,200 shares)
|
115,200
|
121,760
|
|
Oakwood Corp. common (930 shares)
|
171,120
|
170,150
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On October 10, 2020, the Horton shares were sold at a price of $51 per share. In addition, 3,150 shares of Patriot common stock were acquired at $53 per share on November 2, 2020. The December 31, 2020, fair values were Monty $87,420, Patriot $136,340, and Oakwood $183,240.
Required -
1. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2020.
2. Prepare the journal entries for Cullumber Inc. for 2020 and 2021, assuming that Cullumber can exercise significant influence over Kulikowski.