Barry, Hank, and Babe form a company named Long Ball Investments, hoping to find that elusive home

Question:

Barry, Hank, and Babe form a company named Long Ball Investments, hoping to find that elusive home run stock. A new clothing company by the name of Major League Apparel has caught their eye. Major League Apparel has two classes of stock authorized: 5%, $ 10 par preferred and $ 1 common. Long Ball Investments has the following transactions during the year. None of the investments are large enough to exert a significant influence.
January 2 Purchase 1,500 shares of Major League for $ 70 per share.
February 14 Purchase 600 shares of Major League preferred stock for $ 12 per share.
May 15 Sell 300 shares of Major League’s for $ 62 per share.
December 30 Receive a cash on Major League’s of $ 0.50 per share and preferred stock of $ 0.50 per share.
December 31 The fair values of the common and preferred shares are $ 73 and $ 14, 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... 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,...