In: Accounting
During 2018, Speedway Financial Corporation had the following held for trading investment transactions: Feb. 1 Purchased 580 CBF common shares for $34,220. Mar. 1 Purchased 780 RSD common shares for $21,840. Apr. 1 Purchased 7% MRT bonds at face value, for $65,000. Interest is received semi-annually on April 1 and October 1. July 1 Received a cash dividend of $3 per share on the CBF common shares. Aug. 1 Sold 180 CBF common shares at $57 per share. Sept. 1 Received a cash dividend of $1.40 per share on the RSD common shares. Oct. 1 Received the semi-annual interest on the MRT bonds. 1 Sold the MRT bonds for $67,000. Dec. 31 The market prices of the CBF and RSD common shares were $54 and $29 per share, respectively. Speedway had the following held for trading investment transactions in 2019: Mar. 1 Sold 400 CBF common shares for $23,200. June 1 Purchased 2,200 KEF common shares for $30,800. Sept. 1 Received a cash dividend of $1.40 per share on the RSD common shares. Oct. 1 Sold 390 RSD common shares for $12,090. Dec. 31 The market prices of the RSD and KEF common shares were $33 and $11 per share, respectively.
DATE | PARTICULARS | DEBIT | CREDIT |
Feb-01 | held for trading investments | 34220 | |
to cash | 34220 | ||
Mar-01 | held for trading investments | 21840 | |
to cash | 21840 | ||
Apr-01 | held for trading investments | 65000 | |
to cash | 65000 | ||
Jul-01 | cash | 1740 | |
to dividend revenue | 1740 | ||
Aug-01 | cash | 10260 | |
realised loss on held for trading investments | 360 | ||
to held for trading investments | 10620 | ||
Sep-01 | cash | 1092 | |
to dividend revenue | 1092 | ||
Oct-01 | cash | 2275 | |
to interest revenue | 2275 | ||
cash | 67000 | ||
to held for trading investments | 65000 | ||
to realised gain on held for trading investments | 2000 | ||
Dec-01 | unrealised loss on held for trading investments | 1220 | |
to held for trading investments | 1220 | ||
oct 1
cash = (65000 x 7%)/2 = 2275
dec 1
{(580-180) x [(34220/580)-54} + 780 x [(21840/780) -29 ]
= 2000 + (-780)
=1220