Emmitt, Walter, and Barry form a company named Long Run Investments, with the intention of investing in

Question:

Emmitt, Walter, and Barry form a company named Long Run Investments, with the intention of investing in with great long- run potential. A clothing company named National League Gear looks like a great investment prospect. National League Gear has two classes of stock authorized: 6%, $ 30 par preferred and $ 5 common. Long Run Investments has the following transactions during the year. None of the investments are large enough to exert a significant influence.
February 2 Purchases 1,500 shares of National League Gear’s for $ 35 per share.
February 4 Purchases 600 shares of National League Gear’s preferred stock for $ 32 per share.
July 15 Sells 400 shares of National League Gear’s for $ 40 per share.
November 30 Receives a cash on National League Gear’s of $ 1.10 per share and preferred stock of $ 1.80 per share.
December 31 The fair value of the common and preferred shares equal $ 31 and $ 30, respectively.

Required:
1. Record each of these investment transactions.
2. Calculate the balance in the Investments account as of December 31.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...