During the fourth quarter of 2021, Rainbarrel, Inc., generated excess cash, which the company invested in equity
Question:
During the fourth quarter of 2021, Rainbarrel, Inc., generated excess cash, which the company invested in equity securities as follows:
Requirements
1. Open T-accounts for Cash (including its beginning balance of $23,000), Investment in Equity Securities, Dividend Revenue, and Unrealized Gain (Loss) on Equity Securities.
2. Journalize the foregoing transactions and post to the T-accounts.
3. Show how to report the short-term investment on Rainbarrel’s balance sheet at December 31, 2021.
4. Show how to report whatever should appear on Rainbarrel’s income statement for the year ended December 31, 2021.
5. Rainbarrel sold the equity securities for $6,000 on January 14, 2022. Journalize the sale.
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Step by Step Answer:
1 TAccounts Cash Date Description Debit Credit Nov 16 2021 Purchase of equity securities 7200 Dec 16 ...View the full answer
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