Question

The following equity investment transactions were completed by Vintage Company during a recent year:

Apr. 10. Purchased 11,000 shares of Delew Company’s common stock for a price of $60 per share plus a brokerage commission of $220. Delew Company has 250,000 shares of common stock outstanding.

July 8. Received a quarterly dividend of $0.85 per share on the Delew Company investment.

Sept. 10. Sold 3,000 shares for a price of $54 per share less a brokerage commission of $90.

Dec. 31. At the end of the accounting period, the fair value of the remaining 8,000 shares of Delew Company’s stock was $59.90 per share.

Journalize the entries for these transactions.

 

Answer 1

DateAccount titlesDebit $Credit $Apr.10Investment in Delew Company660,220

Cash
660,220
( 11,000 x 60 ) + 220





July.8Cash       9,350

Dividend Revenue
       9,350
( 11,000 x 0.85 )





Sept.10Cash ( 3,000 x 54 ) - 90161,910

Loss on sale of Investment     18,150

Investment in Delew Company
180,060
( 660,220 x 3,000 /11,000 )





Dec.31Unrealized Holding gain or loss          960

Fair Value Adjustment
          960
(660,220 x 8,000/11,000) - ( 8,000 x 59.90)

Dec.31	Unrealized Holding gain or loss	960
	Fair Value Adjustment		960
	(660,220 x 8,000/11,000) - ( 8,000 x 59.90)