The following data pertain to the securities of Linford Company during 2012, the companys first year of

Question:

The following data pertain to the securities of Linford Company during 2012, the company’s first year of operations:

a. Purchased 400 shares of Persimmon Corporation stock at $40 per share plus a commission of $200. This security is classified as trading.

b. Purchased $6,000 of Kiwi Corporation bonds. These bonds are classified as trading.

c. Received a cash dividend of $0.50 per share on the Persimmon stock.

d. Sold 100 shares of Persimmon stock for $46 per share.

e. Received interest of $240 on the Kiwi bonds.

f. Purchased 50 shares of Mango Corporation stock for $3,500. Classified the stock as available-for-sale.

g. Received interest of $240 on the Kiwi bonds.

h. Sold 150 shares of Persimmon stock for $28 per share.

i. Received a cash dividend of $1.40 per share on the Mango stock.

j. Recorded interest receivable at year-end on the Kiwi bonds of $60.

Required:

Prepare journal entries to record the preceding transactions. Post the entries to T-accounts, and determine the amount of each of the following for the year:

1. Dividend revenue

2. Bond interest revenue

3. Net gain or loss from selling securities


Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For  answer-question

Accounting concepts and applications

ISBN: 978-0538745482

11th Edition

Authors: Albrecht Stice, Stice Swain

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