Princeton Company acquired some of the 45,000 outstanding shares of the common s

Question

Princeton Company acquired some of the 45,000 outstanding shares of the common stock of Cox Corporation as trading securities. The accounting period for both companies ends December 31 July 2 Purchased 8,100 shares of Cox common stock at $30 per share. Dec. 15 Cox Corporation declared and paid a cash dividend of $3 per share. Dec. 31 Determined the fair value of Cox stock to be $31 per share. Required: Prepare the journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of 8,100 shares of Cox common stock at $30 per share Note: Enter debits before credits. Date General Journal Debit Credit Jul 02 Record entry Clear entry View general Journal

Explanation / Answer

Solution:

Journal Entries

Date

Account Titles and Explanation

Debit

Credit

Recording the purchase of 8,100 Shares of Cox Common Stock at $30 per share

Jul.02

Security Held for Trading (8100*30)

$243,000

Cash

$243,000

Recording of receipt of cash dividends of $3 per share

Dec.15

Cash (8100*3)

$24,300

Dividend Income

$24,300

Fair Value adjustment

Dec.31

Security Held for Trading (8100*1)

$8,100

Unrealized Gain on Security held for trading

$8,100

Securities held for trading is valued at fair value at the reporting date. Any income by way of dividend or interest is recorded as Dividend Income.

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Date

Account Titles and Explanation

Debit

Credit

Recording the purchase of 8,100 Shares of Cox Common Stock at $30 per share

Jul.02

Security Held for Trading (8100*30)

$243,000

Cash

$243,000

Recording of receipt of cash dividends of $3 per share

Dec.15

Cash (8100*3)

$24,300

Dividend Income

$24,300

Fair Value adjustment

Dec.31

Security Held for Trading (8100*1)

$8,100

Unrealized Gain on Security held for trading

$8,100

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

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