Prepare the journal entry for security sale on may twenty

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Reference no: EM131911568

Problem

Marin Corporation made the following cash purchases of securities during 2017, which is the first year in which Marin invested in securities.

1. On January 15, purchased 10,220 shares of Sanchez Company's common stock at $36.90 per share plus commission $2,200.
2. On April 1, purchased 5,220 shares of Vicario Co.'s common stock at $57.20 per share plus commission $3,590.
3. On September 10, purchased 7,220 shares of WTA Co.'s preferred stock at $29.20 per share plus commission $5,130.

On May 20, 2017, Marin sold 4,220 shares of Sanchez Company's common stock at a market price of $39 per share less brokerage commissions, taxes, and fees of $4,070. The year-end fair values per share were Sanchez $33, Vicario $61, and WTA $30.80. In addition, the chief accountant of Marin told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.

Prepare the journal entry for the security sale on May 20.

Reference no: EM131911568

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