Portal Holdings Ltd. had the following short-term investments in marketable securities on December 31, 2016, at fair
Question:
Portal Holdings Ltd. had the following short-term investments in marketable securities on December 31, 2016, at fair value and book value:
Canadian Utilities Limited ...........$310,000
TELUS Corporation .................. 425,000
Talisman Energy Ltd. ................ 160,000
Total short-term investments .........$895,000
Portal Holdings Ltd. had the following investment transactions during 2017:
Jan. 5 Purchased 5,000 shares (2 percent) of Salmon Ltd. as a short-term investment. The shares were purchased at $50.00 and the commission was $300.
31 Salmon Ltd. reported net income of $1,500,000 and declared a cash dividend of $900,000.
Feb. 15 Received $18,000 from Salmon Ltd. as a cash dividend.
Apr. 1 Purchased $300,000 (face value) of bonds at 100 as a long-term investment. The bonds pay 6 percent interest (3 percent semi-annually) on October 1 and April 1 and mature in two years.
Aug. 31 Received a 10 percent stock dividend from Salmon Ltd.
Oct. 1 Received the interest on the bonds.
Nov. 1 Salmon Ltd. declared and distributed a 2-for-1 stock split.
Dec. 15 Sold 3,300 shares of Salmon Ltd. at $48.00 and the commission was $200.
31 Recorded the adjustment for accrued interest on the bonds.
31 The fair values of the investments were as follows:
Canadian Utilities Limited .......... $ 290,000
TELUS Corporation .................. 420,000
Salmon Ltd. ............................ 270,000
Talisman Energy Ltd. ................. 175,000
Total short-term investments ...$1,155,000
Required
Prepare the general journal entries required to record the transactions of 2017.
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Step by Step Answer:
Horngrens Accounting
ISBN: 978-0133855388
10th Canadian edition Volume 2
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood