a. On February 15, paid $130,000 cash to purchase American General\'s 90-day sho

Question

a. On February 15, paid $130,000 cash to purchase American General's 90-day short-term notes at par, which are dated February 15 b. On March 22, bought 800 shares of Fran Industries common stock at $26 cash per share plus a $160 brokerage fee (classified as c. On May 15, received a check from American General in payment of the principal and 90 days' interest on the notes purchased in d. On July 30, paid $39,000 cash to purchase MP3 Electro s % notes at par, dated July 30, 2017, and maturing On January 30, 20e and pay 9% interest (classified as held-lo-maturity) long term available-for-sale securities) transaction a (classified as trading securities) e. On September 1, received a $0.74 per share cash dividend on the Fran Industries common stock purchased in transaction &b f. On October 8, sold 400 shares of Fran Industries common stock for $32 cash per share, less a $140 brokerage fee g. On October 30, received a check from MP3 Electronics for three months interest on the notes purchased in transaction d Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Cancun Corp. all of which occurred during calendar-year 2017, Use the account Short-Term Investments for any transactions that you determine are short term (Use 360 days in a year. Do not round your intermediate calculations.)

Explanation / Answer

Journal Entries Date General Journal Debit ($) Credit ($) Feb 15 Short-term investments—HTM (A.G.)          130,000 Cash        130,000 (Americal general short term notes purchased) Mar 22 Long-term investments—AFS (Fran)            20,960 Cash (800*26)+160          20,960 (Long-term note purchased) May 15 Cash          132,925 Short-term investments—HTM (A.G.)        130,000 Interest Revenue (130,000*9%)*90/360            2,925 (Check received for Short term Notes purchased) July 30 Short-term investments—Trading (MP3)            39,000 Cash          39,000 (MP3 electronics purchased) Sept 1 Cash (800*0.74)                 592 Dividend Revenue               592 (Dividend received) Oct 8 Cash (400*32)-140            12,660 Long-term investments—AFS (Fran) (20,960/2)          10,480 Gain on sale of long-term investments            2,180 (400 shares sold of Frans) Oct 30 Cash (39,000*8%)*3/12)                 780 Interest Revenue               780 (3 Months interest received from MP3 electronics)

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