Question

9:15 PM Wed Feb 5 C16 #1 Problem 16-02A a-d (Video) In January 2020, the management of Oriole Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred. Feb. 1 Mar. 1 Apr. 1 Purchased 700 shares of Muninger common stock for $38,500. Purchased 900 shares of Tatman common stock for $22,500. Purchased 40 $1,140, 8% Yoakem bonds for $45,600. Interest is payable semiannually on April 1 and Octob July 1 Aug. 1 Sept. 1 Oct. 1 Oct. 1 Received a cash dividend of $0.70 per share on the Muninger common stock. Sold 233 shares of Muninger common stock at $65 per share. Received a $1 per share cash dividend on the Tatman common stock Received the semiannual interest on the Yoakem bonds. Sold the Yoakem bonds for $44,600. At December 31, the fair value of the Muninger common stock was $56 per share. The fair value of the Tatman comm stock was $24 per share. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account for (Record journal entries in the order presented in the problem. Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" fort account titles and enter o for the amounts.) Debit Credit Date Account Titles and Explanation 38500 Feb. 1 - Stock Investments 38500 Cash 22500 Mar. 1 Stock Investments 22500 Cash 45600 Apr. 1 Debt Investments 45600 Cash July 1 Cash 630 Dividend Revenue 15145 Aug. 1 Cash 2330 Gain on Sale of Stock Investments 12815 Stock Investments 900 Sept. 1 Cash 900 Dividend Revenue

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Feb-01	Stock investments	$ 38,500
	Cash		$ 38,500
	( to record purchase of muninger common stock )
Mar-01	Stock investments	$ 22,500
	Cash		$ 22,500
	( to record purchase of Tataman common stock )
Apr-01	Debt investments (40 bonds * $ 1140 )	$ 45,600
	Cash		$ 45,600
	( to record purchase of 8% yoakem bonds )
Jul-01	Cash ( 700 shares * $ 0.70 per share )	$ 490
	Dividend revenue		$ 490
	( to record received dividend income of muninger )
Aug-01	Cash (233 shares * $ 65 per share )	$ 15,145
	Stock investments ($38,500/700 *233 shares)		$ 12,815
	Gain on sale of stock investments(15145-12,815)		$ 2,330
	( to record sold 233 shares of muninger common stock @65 )
Sep-01	Cash (900 shares * $ 1per share )	$ 900
	Dividend revenue		$ 900
	( to record received dividend income of Tataman )
Oct-01	Cash (40 bonds * $1140 * 8 %)	$ 3,648
	interest revenue		$ 3,648
	( to record received semiannual interest on Yoakem )
Oct-01	Cash	$ 44,600
	Loss on sale of debt investments(45,600-44,600)	$ 1,000
	Debt investments (40 bonds * $ 1140 )		$ 45,600
	(To record sold Yoakem bonds for $ 44,600 )

STOCK INVESTMENTS
Feb-01	$ 38,500	Aug-01	$ 12,815
Mar-01	$ 22,500
Dec-31	$ 48,185
(Balance)

DEBT INVESTMENTS
Apr-01	$ 45,600	Oct-01	$ 45,600
Dec-31	$ 0
(Balance)

Date	Account Titles and Explanation	Debit	Credit
Dec-31	Unrealized loss - income ( see note 1 )	$ 433
	Market adjustment - Trading		$ 433
	( to record adjustment entry to report investment securities at fair value )

NOTE 1 :
Calculate the unrealized loss :
Cost of Stock investments		$ 48,185
(see in T account )
less:
Fair of Remaining Muninger common stock	$ 26,152
(700-233 )shares * $ 56 per share )
Fair of Tataman common stock	$ 21,600
(900 shares * $ 24 per share )		($47,752)
Unrealized loss		$ 433

Oriole company
Balance sheet (Partial )
December 31,2020
Current Assets :
Short term Investments at fair value ($48,185- $433)	$ 47,752

Income Statement Account	Category
Dividend Revenue	Other Revenue and Gains
Gain on sale of stock investments	Other Revenue and Gains
Interest Revenue	Other Revenue and Gains
Loss on sale of Debt investments	Other Expenses and Losses
Unrealized loss- income	Other Expenses and Losses