Question

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $45 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.

2018
Oct.		18		Purchased 2 million preferred shares of Millwork Ventures Company for $72 million.
		31		Received semiannual interest of $2.7 million from the Kansas Abstractors bonds.
Nov.		1		Purchased 10% bonds of Holistic Entertainment Enterprises at their $66 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31.
		1		Sold the Kansas Abstractors bonds for $41 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously.
Dec.		1		Purchased 12% bonds of Household Plastics Corporation at their $70 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30.
		20		Purchased U. S. Treasury bonds for $6.6 million as trading securities, hoping to earn profits on short-term differences in prices.
		21		Purchased 4 million common shares of NXS Corporation for $64 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale.
		23		Sold the Treasury bonds for $6.9 million.
		29		Received cash dividends of $3 million from the Millwork Ventures Company preferred shares.
		31		Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $34.50 per share and $17.50 per share for the NXS Corporation common. The fair values of the bond investments were $63.7 million for Household Plastics Corporation and $17.7 million for Holistic Entertainment Enterprises.

2019
Jan.		7		Sold the NXS Corporation common shares for $60 million.

Required:
Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)

Answer 1

Date	General description	Debit	credit
Oct-18	Purchased 2 Million preferred shares of Milkwork Ventures company for $72Million
	Investment in Milkventures preffered shares	$72million
	cash		$72million
Oct-31	Received semi annual interest of $2.7Million from the kansas abstractors Bonds
	Cash	$2.7million
	Investment income		$2.7million
Nov-01	Purchased 10%bonds from holistic entertainment bonds
	Investment in Holistic Entertainment bonds	$66 million
	cash		$66 million
Nov-01	Sold Kansas abstractors bonds
	Cash	$41 million
	Loss on sale of investments	$4 Million
	Investment in kansas abstractors bonds		$45 million
Dec-01	Purchased 12% bonds of household plastic corporation
	Investment in household plastic bonds	$70 million
	cash		$70 million
Dec-20	Purchased US treasury bonds for $6.6 million as trading securities
	Investment in US Treasury bonds	$6.6million
	cash		$6.6million
Dec-21	Purchased 4 Million commonshares Of NXS corporation
	Investment in NXS common shares	$64 million
	cash		$64 million
Dec-23	Sold treasury bonds for $6.9million
	Cash	$6.9 million
	Investment in US Treasury bonds		$6.6million
	Gain on sale of investments		$0.3 million
Dec-29	Received cash dividend of $3million from Milk ventures company prefred shares
	Cash	$3 million
	Investment revenue		$3 million
Dec-31	Accrued interest
	Investment revenue receivable - holistic entertainment ($66million*10%*2/12)	$1.1 million
	Investment revenue receivable - household plastics ($70million *12%*1/12)	$0.7milliom
	Investment revenue		$1.8 million
	Revaluations
	Net realized holding gains and losses	$3million
	Fair value adjustment		$3million
	[{2million preferred shares *$34.50)-$72million]
	Fair value adjusment	$6million
	Net realized holding gains and losses		$6million
	[(4million common shares NXScorporation *$17.50 per share)]-$64millio
	Net realized holding gains and losses	$6million
	Investment revenue [$1.8million + $3million +$2.7million]	$7.5million
	Gain on sale of investments	$0.3 million
	Loss on sale of investments		$4 Million
	Income summary (bal fig)		$9.8 million
Jan-07	sold the NXS corporation common shares for $60million
	cash	$60million
	Loss on sale of investment	$4million
	Investment in NXS common shares		$64 million