Kenseth Company has the following securities in its portfolio on December 31, 2020. None of these investments are accounted for under the equity method.

All of the securities were purchased in 2020.

In 2021, Kenseth completed the following securities transactions.

March 1 Sold the 1,500 shares of Gordon, Inc., common, @ $45 less fees of $1,200.

April 1 Bought 700 shares of Earnhart Corp., common, @ $75 plus fees of $1,300. Kenseth?s portfolio of equity securities appeared as follows on December 31, 2021.

Instructions

Prepare the general journal entries for Kenseth Company for:

a. The 2020 adjusting entry.

b. The sale of the Gordon stock.

c. The purchase of the Earnhart stock.

d. The 2021 adjusting entry for the portfolio.

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Fair Value Cost Investments 1,500 shares of Gordon, Inc., common 5,000 shares of Wallace Corp., common 400 shares of Martin, Inc., preferred $ 73,500 $ 69,000 180,000 60,000 175,000 61,600 $313,500 $305,600 Cost Fair Value Investments 5,000 shares of Wallace Corp., common 700 shares of Earnhart Corp., common |400 shares of Martin, Inc., preferred $180,000 $175,000 50,400 53,800 60,000 58,000 $293,800 $283,400