Rocktown Corporation bought 710 shares of General Eccentric stock on March 20 fo

Question

Rocktown Corporation bought 710 shares of General Eccentric stock on March 20 for its trading securities portfolio at $19 per share. Rocktown sold the stock at $23 per share on June 23. Prepare the journal entries to record the transactions on each of these dates, assuming that the investment had not yet been adjusted to fair value (that is, the investment was still recorded at cost at the time of sale).

Record the purchase of 710 shares of General Eccentric stock by Rocktown Corporation for its trading securities portfolio at $19 per share.

Record the sale of General Eccentric’s stock by Rocktown Corporation at $23 per share. The investment had not been adjusted for any difference between the purchase price and fair value.

Explanation / Answer

RockTown Corp Accounting entry Date Account Title Dr $ Cr $ Mar 20. Cash                  13,490 Investment in Trading Security-GE                  13,490 (recording investment) Jun 23. Investment in Trading Security-GE                  13,490 Cash                  16,330 Gain on Sale Of Investment                    2,840 (recording sale with gain)

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.