Question

Write the journal entries for each:

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 10,000 shares of Gem Co. stock at $28.75 per share plus a $460 brokerage fee.
May	1	Paid $190,000 to buy 3-month U.S. Treasury bills (debt securities): $190,000 principal amount, 6% interest, securities mature on July 31.
July	7	Purchased 5,000 shares of PepsiCo stock at $49.00 per share plus a $430 brokerage fee.
	20	Purchased 2,500 shares of Xerox stock at $19.00 per share plus a $510 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 $.90 per share cash dividend on the Gem Co. stock.
	28	Sold 5,000 shares of Gem Co. stock at $35.50 per share less a $550 brokerage fee.
Oct.	1	Received a $1.90 per share cash dividend on the PepsiCo shares.
Dec.	15	Received a $1.05 per share cash dividend on the remaining Gem Co. shares.
	31	Received a $1.25 per share cash dividend on the PepsiCo shares.

Answer 1

	Rose Company
	General journal entries
Date	Description		Debit ($)	Credit ($)
Apr 16	Short term investment - GEM (10,000*28.75)+460		287,960
		Cash		287,960
	(Stock purchased)
May 1	Short term investment - T Bills		190,000
		Cash		190,000
	(Stock purchased)
Jul 7	Short term investment - Pepisco (5,000*49)+430)		245,430
		Cash		245,430
	(Stock purchased)
Jul 20	Short term investment - Xerox (2,500*19)+510		48,010
		Cash		48,010
	(Stock purchased)
Aug 1	Cash		192,850
		Short term investment - T Bills		190,000
		Interest revenue (190,000*6%)*3/12		2,850
	(Check received)
Aug 15	Cash (10,000*0.9)		9,000
		Dividend Revenue		9,000
	(Dividend received)
Aug 28	Cash (5,000*35.5)-550		176,950
		Gain on sale of short term investment		32,970
		Short term investment - AFS (287,960/10,000)*5,000		143,980
	(Stock sold and gain recorded)
Oct 1	Cash (5,000*1.9)		9,500
		Dividend Revenue		9,500
	(Dividend received)
Dec15	Cash (5,000*1.05)		5,250
		Dividend Revenue		5,250
	(Dividend received)
Dec31	Cash (5,000*1.25)		6,250
		Dividend Revenue		6,250
	(Dividend received)