ACCT 1020, Test 2 Spring 208 PROBLEM 2, 20 points Willamson Corporation had the

Question

ACCT 1020, Test 2 Spring 208 PROBLEM 2, 20 points Willamson Corporation had the following transnctions invot non-influential securities during the current year. Prepare the Coporation had the following transactions involving nvestments in various eritries to recomd Purchased 700 shares of NG Corp stock at $31 per share plus a $400 brokr The bonds Jan NG Corp stock at $31 per share plus a $400 trokerage fee with the intent of actively trading thess securities Purchased S60.000 of Megn Co 5%, e-year bonds until they mature face value 1tends to hoid Feb 16 pay intereet semi-nnsually on Jun 30 and D ar 2 Received a s0.95 per share dividend from NG Corp ar 28 Sold 200 shares of NG Corp stock for $28 per sharo less a $175 brokerage fee 130 Received the semi-annual interest payment from Mega Co 30 Fiscal year end. The fair value of GN stock is $30 per share Account DR CR Swanson Page 6 of 9

Explanation / Answer

Date

Accounts Titles & Explanation

Debit

Credit

Jan. 1

Trading securities (700 * $31 + $400)

$22100

     Cash

$22100

(For recording purchase of trading securities)

Feb. 16

Investment in Bonds

$60000

     Cash

$60000

(For recording purchase of 5% Bonds)

March 2

Cash (700 * $0.95)

$665

     Dividend Income

$665

(For recording receipts of dividend income)

March 28

Cash (200 * $28 – $175)

$5425

Realized loss on sale of trading securities

$889.25

     Trading securities

$6314.28

(For recording sale of shares)

June 30

Cash

$1125

     Interest Income ($60000 * 5 * 4.5 / 100 * 12)

$1125

(For recording interest income from 16 Feb. to June 30)

June 30

Unrealized holding loss on Trading Securities

$500

     Trading securities (500 * $1)

$500

(For recording fair value of the stock)

Date

Accounts Titles & Explanation

Debit

Credit

Jan. 1

Trading securities (700 * $31 + $400)

$22100

     Cash

$22100

(For recording purchase of trading securities)

Feb. 16

Investment in Bonds

$60000

     Cash

$60000

(For recording purchase of 5% Bonds)

March 2

Cash (700 * $0.95)

$665

     Dividend Income

$665

(For recording receipts of dividend income)

March 28

Cash (200 * $28 – $175)

$5425

Realized loss on sale of trading securities

$889.25

     Trading securities

$6314.28

(For recording sale of shares)

June 30

Cash

$1125

     Interest Income ($60000 * 5 * 4.5 / 100 * 12)

$1125

(For recording interest income from 16 Feb. to June 30)

June 30

Unrealized holding loss on Trading Securities

$500

     Trading securities (500 * $1)

$500

(For recording fair value of the stock)

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