On January 15, 2015, White Alberta Inc. invested in bonds issued for $200,000 by Wheat Grain Inc. and in 10,000 shares of Ontario Sun Inc. at $10 per share. White Alberta's intention is to resell the bonds and shares within a short period of time. At year-end the price of the bonds went down to $195,000 and the shares increased in value to $12 per share. The following table summarizes this information:

On January 20, 2016, White Alberta Inc. sold the bonds and shares for $196,000 and $122,000, respectively.
Requirements
1. Prepare the necessary journal entry to record White Alberta's original investment in the bonds.
2. Prepare the required adjusting entries on December 31, 2015.
3. Prepare the necessary journal entries when White Alberta sold its investments.

Transcribed Image Text:

Acquisition Price $200,000 Current Price Gain/(Loss) $(5,000) $20,000 $15,000 Wheat Grain Inc. Bonds Ontario Sun Inc. Shares $195,000 $120,000 $315,000 $100,000 $300,000 Total