Question

Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.

Apr.	16	Purchased 8,000 shares of Gem Co. stock at $25.25 per share plus a $320 brokerage fee.
May	1	Paid $280,000 to buy 3-month U.S. Treasury bills (debt securities): $280,000 principal amount, 5% interest, securities mature on July 31.
July	7	Purchased 4,000 shares of PepsiCo stock at $46.00 per share plus a $290 brokerage fee.
	20	Purchased 2,000 shares of Xerox stock at $15.00 per share plus a $370 brokerage fee.
Aug.	1	Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.
	15	Received an $.85 per share cash dividend on the Gem Co. stock.
	28	Sold 4,000 shares of Gem Co. stock at $32.00 per share less a $410 brokerage fee.
Oct.	1	Received a $1.80 per share cash dividend on the PepsiCo shares.
Dec.	15	Received a $1.00 per share cash dividend on the remaining Gem Co. shares.
	31	Received a $1.15 per share cash dividend on the PepsiCo shares.

1. Prepare journal entries to record the preceding transactions and events

Answer 1

Date	Particulars	Debit	Credit
Apr.16	Investment in gem stock	202,320
	Cash		202,320
May.1	Investment in U.S treasury bills	280,000
	Cash		280,000
July.7	Investment in pepsi co stock	184,290
	Cash		184,290
Jul.20	Investment in xerox stock	30,370
	Cash		30,370
Aug.1	Cash	283,500
	Interest revenue		3,500
	Investment in U.S treasury bills		280000
Aug.15	Cash	6,800
	Dividend income		6,800
Aug.28	Cash	127,590
	Investment in gem stock		101,160
	Realised gain on sale of available for sale securities		26,430
Oct.1	Cash	7,200
	Dividend income		7,200
Dec.15	Cash	4,000
	Dividend income		4,000
Dec.31	Cash	4,600
	Dividend income		4,600