During January 2017, Long Corporation for the first time decided to acquire some equity securities...
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Accounting
During January 2017, Long Corporation for the first time decided to acquire some equity securities as a means of putting some of its idle cash to work. The securities are classified as trading securities. At March 31, when Long prepares its first quarter financial statements, the following information about the acquired securities is available:
Securities
Cost
Market
1
$52,000
$50,000
2
32,000
29,000
3
35,000
27,000
Required:
a.
Prepare the journal entries to record the acquisition in January and valuation at the end of the first quarter of 2017.
b.
Assume that on June 30, 2017, the company still has this same portfolio. The market value of 1 is $57,000, 2 is $30,000, and 3 is $31,000. What journal entry, if any, should be prepared at the end of the second quarter?
c.
On August 15, 2017, Long Corporation sold Security 3 for $33,000. Prepare the journal entry to record this transaction.
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