Berkshire Co. purchases debt investments in trading securities at a cost of ($ 130) on July 1
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Berkshire Co. purchases debt investments in trading securities at a cost of \(\$ 130\) on July 1 . (This is its first and only purchase of trading securities.) On December 30, Berkshire received \(\$ 1\) of interest from its trading securities. At year-end December 31, the trading securities had a fair value of \(\$ 140\).
a. Prepare the July 1 purchase entry of trading securities.
b. Prepare the December 30 entry for receipt of cash interest.
c. Prepare the December 31 year-end adjusting entry for the trading securities' portfolio.
d. Explain how each account in entry \(c\) is reported in financial statements.
e. Prepare the January 3 entry when a portion of its trading securities (that had cost \(\$ 33\) ) is sold for \(\$ 36\).
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a b and c e July 1 Dec 31 Debt InvestmentsTrading Cash Record purchase ...View the full answer
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