What\'s the correct answer for the ones in highlighted in red? Princeton Company

ID: 2719858 • Letter: W

Question

What's the correct answer for the ones in highlighted in red?

Princeton Company acquired some of the 75,000 outstanding shares of the common stock of Cox Corporation as trading securities. The accounting period for both companies ends December 31. Assume that Princeton Company purchased the voting stock of Cox Corporation for its portfolio of available-for-sale securities instead of its trading securities portfolio. July 2 Purchased 9,000 shares of Cox common stock at $23 per share. Dec. 15 Cox Corporation declared and paid a cash dividend of $2 per share. Dec. 31 Determined the fair value of Cox stock to be $24 per share. Prepare the journal entries for each of the above transactions listed. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

Journal Entries

Securities available for sales A/c Dr.

To Cash

(Being Securities purchased for cash in category of available for sale)

Dividend Recievable A/c Dr.

To Dividend Income A/c

( Being Dividend income recognized)

Cash A/c Dr.

To Dividend recievable A/c

(Being dividend recieved)

Dividend Income A/c Dr.

To Profit & Loss A/c

(Being income transfered to P& L)

18000

Dec 31

Securities available for sale A/c Dr.

To Unrealized gain on Securities available for sale A/c

(Being unrealized gain recorded)

Date Particulars Debit Credit July 02