In January 2014, the management of Kinzie Company concludes that it has sufficient cash to permit some

Question:

In January 2014, 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 for $32,400.
Mar. 1 Purchased 800 shares of Tatman 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 of $0.60 per share on the Muninger .
Aug. 1 Sold 200 shares of Muninger at $58 per share.
Sept. 1 Received a $1 per share cash on the Tatman .
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 was $55 per share. The fair value of the Tatman was $24 per share.

Instructions
(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, 2014, to report the investment securities at fair value. All securities are considered to be trading securities.
(c) Show the presentation of investment securities at December 31, 2014.
(d) Identify the income statement accounts and give the statement classification of each account.

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