Journalize investment transactions, prepare adjusting entry, and show statement presentation. In January 2017, the management of...

Journalize investment transactions, prepare adjusting entry, and show statement presentation.

In January 2017, the management of Kirry Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred.

Feb.	1	Purchased 800 shares of Merge common stock for $46,400.
Mar.	1	Purchased 1,500 shares of Taft common stock for $25,500.
Apr.	1	Purchased 75 $1,000, 9% Yale bonds for $76,500. Interest is payable semiannually on April 1 and October 1.
July	1	Received a cash dividend of $1.30 per share on the Merge common stock.
Aug.	1	Sold 500 shares of Merge common stock at $59 per share.
Sept.	1	Received a $2.5 per share cash dividend on the Taft common stock.
Oct.	1	Received the semiannual interest on the Yale bonds.
Oct.	1	Sold the Yale bonds for $73,800.

		At December 31, the fair value of the Merger common stock was $57 per share. The fair value of the Tatman common stock was $17 per share.




		Instructions
		(a) Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.)

		(a) Prepare the adjusting entry at December 31, 2017, to report the investment securities at fair value. All securities are considered to be trading securities.

		(c) Show the balance sheet presentation of investment securities at December 31, 2017.

		(d) Identify the income statement accounts and give the statement classification of each account.

Expert Solution

Journal Entries and Adjusting Entries:

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