Journ Co. purchased short-term investments in available-for-sale securities at a

Question

Journ Co. purchased short-term investments in available-for-sale securities at a cost of $50,000 on November 25, 2015. At December 31, 2015, these securities had a fair value of $47,000. This is the first and only time the company has purchased such securities.

Prepare the December 31, 2015, year-end adjusting entry for the securities' portfolio and the April 6, 2016, entry when Journ sells one-half of these securities for $26,000. (If no entry is required select No journal entry required in the first entry field)

Prepare the December 31, 2015, year-end adjusting entry for the securities' portfolio and the April 6, 2016, entry when Journ sells one-half of these securities for $26,000. (If no entry is required select No journal entry required in the first entry field)

Explanation / Answer

december 31 2015

profit and loss a/c dr $ 3,000

securities a/c $ 3,000

being the securities value is adjustd in year end

april 6

bank a/c dr $ 26,000

to securities a/c $ 23,500

to profit and loss a/c $ 2,500

being half of the securities are sold and profit adjusted to pl account

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