d. Using the same transaction information as above and assuming the investments

Question

d. Using the same transaction information as above and assuming the investments in marketable securities are classified as available-for-sale, () post the journal entries to their respective T-accounts, and (ii) record each of the transactions in the financial statement effects template (1) Purchased 6,000 common shares of Liu, Inc., for $12 cash per share. (2) Received a cash dividend of $1.10 per common share from Liu. (3) Year-end market price of Liu common stock is $11.25 per share. (4) Sold all 6,000 common shares of Liu for $66,900 i. Prepare journal entries to record the four transactions.

Explanation / Answer

1) Common shares a/c dr 72000

To cash a/c 72000

2) Cash a/c dr 6600

To dividends receivable a/c 6600

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