In January 2012, the management of Stefan Company concludes that it - 10386

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In January 2012, the management of Stefan 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

 

Purchased 700 shares of Superior common stock for $37,100, plus brokerage fees of $670.

Mar. 1

 

Purchased 750 shares of Pawlik common stock for $18,750, plus brokerage fees of $490.

Apr. 1

 

Purchased 30 $1,100, 9% Venice bonds for $33,000, plus $1,200 brokerage fees. Interest is payable semiannually on April 1 and October 1.

July 1

 

Received a cash dividend of $0.69 per share on the Superior common stock.

Aug. 1

 

Sold 175 shares of Superior common stock at $62 per share less brokerage fees of $230.

Sept. 1

 

Received a $1 per share cash dividend on the Pawlik common stock.

Oct. 1

 

Received the semiannual interest on the Venice bonds.

Oct. 1

 

Sold the Venice bonds for $33,000 less $1,200 brokerage fees.

 

At December 31, the fair value of the Superior common stock was $55 per share. The fair value of the Pawlik common stock was $24 per share.

 

 

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Your answer is correct.

 

 

 

Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.) (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.  Round answers to 0 decimal places, e.g. 125.)

 

Prepare the adjusting entry at December 31, 2012, to report the investment securities at fair value. All securities are considered to be trading securities.

 

Show the balance sheet presentation of investment securities at December 31, 2012.

 

Identify the classification of each account for the income statement accounts

 

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