During 2007 the Dana Company decided to begin investing its idle cash in marketable securities. The information

Question:

During 2007 the Dana Company decided to begin investing its idle cash in marketable securities. The information contained below relates to Dana’s 2007 marketable security transactions:

Feb. 3 Purchased 3,000 shares of Blair Company common stock for $12 per share

Apr. 1 Purchased $20,000 face value of Solomon Inc. 12% bonds at par plus accrued interest; interest on the bonds is payable each June 30 and December 31

June 30 Received the semiannual interest on the Solomon bonds and a $0.25 per share dividend on the Blair common

Sept. 1 Purchased 4,000 shares of Woodman Corporation common for $22 per share

Nov. 1 Purchased $30,000 face value of Edwards Company 11% bonds at par plus accrued interest; interest on the bonds is payable each June 1 and December 1

Dec. 1 Received the interest on the Edwards bonds and sold the bonds at 101

Dec. 30 Received a $0.25 dividend per share on the Blair common and sold all the shares for $35,300

Dec. 31 Received the interest on the Solomon bonds

On December 31, the following information is available concerning the year-end market prices:

Security Quoted Market

Solomon 12% bonds .... 101

Woodman common ...... $23

Required

1. Record Dana’s transactions in temporary investments for 2007.

2. Show the items of income or loss on temporary investments Dana reports on its 2007 income statement.

3. Show the carrying value of Dana’s Temporary Investment account on its December 31, 2007 balance sheet.

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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...