In January 2017 the management of Kinzie Company concludes that
In January 2017, the management of Kinzie Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.
Feb. 1 Purchased 600 shares of Muninger common stock for $32,400.
Mar. 1 Purchased 800 shares of Tatman common stock for $20,000.
Apr. 1 Purchased 50 $1,000, 7% Yoakem bonds for $50,000. Interest is payable semiannually on April 1 and October 1.
July 1 Received a cash dividend of $0.60 per share on the Muninger common stock.
Aug. 1 Sold 200 shares of Muninger common stock at $58 per share.
Sept. 1 Received a $1 per share cash dividend on the Tatman common stock.
Oct. 1 Received the semiannual interest on the Yoakem bonds.
Oct. 1 Sold the Yoakem bonds for $49,000.
At December 31, the fair value of the Muninger common stock was $55 per share. The fair value of the Tatman common stock was $24 per share.

(a) Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.)
(b) Prepare the adjusting entry at December 31, 2017, to report the investment securities at fair value. All securities are considered to be trading securities.
(c) Show the balance sheet presentation of investment securities at December 31, 2017.
(d) Identify the income statement accounts and give the statement classification of each account.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help