Question

American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in price. For the first 11 months of 2012, gains from selling trading securities totaled $8 million, losses were $11 million, and the company had earned $5 million in investment revenue. The following selected transactions relate to American's trading account during December 2012, and the first week of 2013. The company's financial year ends on December 31. No trading securities vwere held by American on December 1, 2012 2012 Dec. 12 Purchased FF&G Company bonds for $12 million. 13 Purchased 2 million Ferry Intercommunications ordinary shares for $22 million 15 Sold the FF&G Company bonds for $12.1 million. 22 Purchased U.S. Treasury bills for $56 million and Treasury bonds for $65 milion. 23 Sold half the Ferry Intercommunications ordinary shares for $10 million. 26 Sold the U.S. Treasury bills for $57 million 27 Sold the Treasury bonds for $63 million. 28 Received cash dividends of $200,000 from the Ferry Intercommunications ordinary shares. 31 Recorded any necessary adjusting entry(s) and closing entries relating to the investments The market price of the Ferry Intercommunications stock was $10 per share 2013 Jan. 2 Sold the remaining Ferry Intercommunications ordinary shares for $10.2 million. 5 Purchased Warehouse Designs Company bonds for $34 million. Required: 1. Prepare the appropriate journal entry for each transaction or event during 2012, including the closing entry to income summary for the year. (Do not round your intermediate calculations. Enter your answers in millions rounded to 1 decimal place.) General Journal Debit Dec. 12 Investment in FF&G Corporation bonds 12.0 Cash 12.0 Dec. 13 Investment in Ferry common shares 22.0 Cash 22.0 Dec. 15 Cash 12.1 Investment in FF&G Corporation bonds 12.0 ovo

Answer 1