Question

	Glaser Company had the following transactions pertaining to debt securities
	held as a short-term investment:
1-Jan	Purchased 50, 8%, $1,000 Adler Company bonds for $50,000 cash
	plus brokerage fees of $800. Interest is payable semi-annually on
	July 1 and January 1.
1-Jul	Received semi-annual interest on Adler Company bonds
31-Dec	Sold 30 Adler Company bonds for $32,000 less $500 brokerage fee.
	Prepare the journal entries for Glaser Co.

	Stone Company had the following transactions pertaining to short-term
	investments in equity securities:
1-Jan	Purchased 1,500 shares of Quayle Company stock for $9,150 cash plus brokerage
	fee of $300.
1-Jun	Received cash dividends of $.50 per share on Quayle Company stock.
15-Sep	Sold 400 shares of Quayle Company stock for $2,500 less brokerage fee of $100.
1-Dec	Received cash dividends of $.50 per share on Quayle Company stock.

Answer 1

Glaser Company Stone Company Journal Enteries Date Particulars Jan-01 Debt Investments a/c To Cash (Investment in Bonds) Dr. Debit in $ Credit in $ 50800 50800 Journal Enteries Date Particulars Jan-01 Stock Investments a/c Dr. To Cash (Investment in Stock) Debit in $ Credit in $ 9450 9450 Jul-01 2000 750 Cash ($50,000 x 8% x 1/2)a/c Dr. To Interest Revenue (Interest payable annually) 2000 Jun-01 Cash (1,500 x $.50) a/c Dr. To Dividend Revenue (Dividend received) 750 Sep-15 31500 180 2400 120 Dec-31 Cash ($32,000 - $500) a/c Dr. Loss on sale of Investment a/c Dr. To Debt Investments To Interest Revenue ($30,000 x 8% x 6/12) (Investment sold) 50000 x 30/50 = 30000 x 8% x 6/12 = 1200 50800 x 30/50 = 30480 2520 Cash ($2,500 - $100) a/c Dr. Loss on Sale of Stock Investments a/c Dr. To Stock Investments. (Investment sold) [400 x ($9,450 = 1,500)] 30480 1200 550 Dec-01 Cash (1,100 x $.50) a/c Dr. To Dividend Revenue (Dividend received) 1100 x 0.50 550