Question

Grass Security, which began operations in 2017, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity. A. 20171. Jan. 20 Purchased 1,000 shares of Johnson & Johnson at $20.50 per share plus a $24a commission. 2. Feb. 9 Purchased 1,200 shares of Sony at $46.20 per share plus a $225 commission. 3. June 12 Purchased 1,500 shares of Mattel at $27.00 per share plus a $195 commission. 4. Dec. 31 per share fair values for stocks in the portfolio are Johnson & Johnson, s21.50; Mattel, s30.9e; and Sony, $38. B. 2018 1. Apr. 15 sold 1,000 shares of Johnson & Johnson at $23.50 per share less a ss25 commission. 2. July 5 sold shares of Mattel at per share less a $235 commission.3. July 22 purchased 600 shares of Sara Lee $22.50 per share plus commission. 4. Aug. 19 900 shares of Eastman at $17 per share plus a $198 commission $2e.ee; and Sony, s35.ee. 5. Dec. 31 per share fair values for stocks in the portfolio $19.25; Lee, $20.00 and $suny, 35.00.C. 2019 1. Feb. 27 Purchased 2,400 shares of Microsoft at $67.00 per share plus a $525 2. June 21 sold 1.20e shares of Sony at $48.00 per share less an $880 commission. 3. June 30 Purchased 1,400 shares of Black & Decker at $36.00 per share plus a $435 3 shares of Sara Lee at $16.2s per are less a $435 commission.4. Nov. 1 sold 9ee shares of Eastman at $22.75 per share less a $625 commission. and Microsoft, $69. ee. r values for stocks in the portfolio are: Black & Decker $39.Required and events and any year-end fair value adjustments to the portfolio of long-term Prepare journal entries to record these transactions "No entry in the first occount available-for-sale securities.

Answer 1

Answer:

Explanation:

Journal entries, 2017:

Jan 20

Dr Investments -JJ 20,500 [1000*20.50 + 240]

Dr Comission expense 240

    Cr Cash 20,740

Feb 9

Dr Investments-S 55,440 [1200*46.20]

Dr Comission expense 225

     Cr Cash 55,665

June 12

Dr Dr Investments - M 40,500 [1500*27]

Dr Comission expense 195

     Cr Cash 40,695

Dec 17

Dr Investments 6850

    Cr Fair value reserve - JJ 1000 [1000*(21.50-20.50)]

    Cr Fair value reserve - M 5850 [1500*(30.90-27)]

Dec 17

Dr Fair value reserve - S 9840 [1200*(46.20-38)]

     Cr Investments 9840

Journal entries, 2018

Apr 15

Dr Cash 22,975

Dr Comission  525

    Cr Realized gain 2000

    Cr Investments - JJ 21,500

July 5

Dr Cash 35,615

Dr Comission 235

Dr Realized loss 10,500

    Cr Investments - M 46,350

July 22

Dr Investments - SL 13,500

Dr Comission expense 480

    Cr Cash 13,980

Aug 18

Dr Investments - EK 15,300

Dr Comission expense 198

    Cr Cash 15,498

Dec 18

Dr Investment 2025 [900*(19.25-17)]

    Dr Fair value reserve - EK 2025

Dec 18

Dr Fair value reserve 5100

    Cr Investment - SL 1500 [600*(22.50-20)]

    Cr Investment - S 3600 [1200*(38-35)]

Journal entries, 2019

Feb 27

Dr Investments - Micro 160,800

Dr Comission expense 525

    Cr Cash 161,325

June 21

Dr Cash 56,720

Dr Comission 880

    Cr Realized gain 15600 [1200*(48-35)]

    Cr Investments - S 42,000

June 19

Dr Investments - BD 50,400

Dr Comission expense 435

    Cr Cash 50,835

Nov 1

Dr Cash 19,850

Dr Comission 625

    Cr Realized gain 3150

    Cr Investments - EK 17,325