Midwest Bank invests in equity securities. At the beginning of December 2019, the bank held no equity securities. During December of 2019, it entered into the following transactions:

Dec. 10	Purchased 400 shares of Carroll Company common stock for $75 per share.
21	Purchased 700 shares of Dynamo Company common stock for $30 per share.

At the end of December, the Carroll Company common stock had a quoted market price of $79 per share, and the Dynamo Company common stock had a quoted market price of $33 per share.

Question

Journal entries to record the preceding information (pay attention to dates) would include:

		Credit to Cash of $51,000
		Credit to Unrealized Holding Gains/Losses - Equity Investments of $3,700
		Credit to Equity Investments of $30,000
		Credit to Fair Value Adjustment - Equity Investments of $3,700

Answer rating: 100% (QA)

The journal entries to record the transactions would be as follows 1 December 10 Debit Equity Invest... View the full answer