The following information applies to the questions displayed below On August 4,
ID: 2596614 • Letter: T
Question
The following information applies to the questions displayed below On August 4, 2014, Cable Corporation purchased 1,000 shares of Satre Company for $34000. The following 12/31/2014 12/31/2015 12/31/2016 Per Share $42 38 32 Satre Company declares and pays cash dvdends of $5 per share on June 1 of each year 6. Required: 1. Prepare joumal entries to record the facts in the case, assuming that Cappio considers the shares to be available-for-sale securities TIP: Net unrealized losses/gains on available-for-sale securities are reported in stockholders equity. (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 1,000 shares of Maxwell Company for $34,000. The company considers the shares to be available for-sale securities. Note: Enter debits before credits General Journal DebitCredit Date August 04, 2014Explanation / Answer
1)AVAILABLE FOR SALE SECURITIES:
1
Equity investments - AFS
34000
Cash
34000
2
Equity investments - AFS
8000
Unrealized gain or loss - AFS - Other Comprehensive Income
8000
(1000*42-34000 = 8000)
3
Cash
5000
Dividend revenue($5*1000 shares)
5000
4
Unrealized gain or loss - AFS -Other comprehensive income (42-38)*1000
4000
Equity investments - AFS
4000
5
Cash
5000
Dividend revenue(1000shares*$5)
5000
6
Unrealized gain or loss - AFS -Other comprehensive income (38-32)*1000
6000
Equity investments - AFS
6000
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1)AVAILABLE FOR SALE SECURITIES:
1
Equity investments - AFS
34000
Cash
34000
2
Equity investments - AFS
8000
Unrealized gain or loss - AFS - Other Comprehensive Income
8000
(1000*42-34000 = 8000)
3
Cash
5000
Dividend revenue($5*1000 shares)
5000
4
Unrealized gain or loss - AFS -Other comprehensive income (42-38)*1000
4000
Equity investments - AFS
4000
5
Cash
5000
Dividend revenue(1000shares*$5)
5000
6
Unrealized gain or loss - AFS -Other comprehensive income (38-32)*1000
6000
Equity investments - AFS
6000
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