Question

Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities.
2015
Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share plus a $125 commission.
Feb. 9 Purchased 2,200 shares of Lucent at $44.25 per share plus a $578 commission.
Oct. 12 Purchased 750 shares of Z-Seven at $7.50 per share plus a $200 commission.
Dec. 31 Fair value of the short-term investments in trading securities is $130,000.
2016
Apr. 15 Sold 800 shares of Ford Motor Co. at $29 per share less a $285 commission.
July 5 Sold 750 shares of Z-Seven at $10.25 per share less a $102.50 commission.
July 22 Purchased 1,600 shares of Hunt Corp. at $30 per share plus a $444 commission.
Aug. 19 Purchased 1,800 shares of Donna Karan at $18.25 per share plus a $290 commission.
Dec. 31 Fair value of the short-term investments in trading securities is $160,000.
2017
Feb. 27 Purchased 3,400 shares of HCA at $34 per share plus a $420 commission.
Mar. 3 Sold 1,600 shares of Hunt at $25 per share less a $250 commission.
June 21 Sold 2,200 shares of Lucent at $42 per share less a $420 commission.
June 30 Purchased 1,200 shares of Black & Decker at $47.50 per share plus a $595 commission.
Nov. 1 Sold 1,800 shares of Donna Karan at $18.25 per share less a $309 commission.
Dec. 31 Fair value of the short-term investments in trading securities is $180,000.
Required
Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities.


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  • CreatedApril 23, 2015
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