Question

Required information The following information applies to the questions displayed below Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017 Apr. 16 Purchased 6,000 shares of Gem Co. stock at $23.00 per share plus a $320 brokerage fee May 1 Paid $150,000 to buy 3-month U. S. Treasury bills (debt securities) : $150,000 principal amount, 4% interest, securities mature on July 31. July 7 Purchased 3,000 shares of PepsiCo stock at $46.00 per share plus a $290 brokerage fee 20 Purchased 1,500 shares of Xerox stock at $20.00 per share plus a $370 brokerage fee Aug. 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31 15 Received an $.80 per share cash dividend on the Gem Co. stock. 28 Sold 3,000 shares of Gem Co. stock at $29.75 per share less a $410 brokerage fee Oct. 1Received a $1.80 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $.95 per share cash dividend on the remaining Gem Co. shares. 31 Received a $1.05 per share cash dividend on the PepsiCo shares. Requirec 1. Prepare journal entries to record the preceding transactions and events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required information The following information applies to the questions displayed below Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017 Apr. 16 Purchased 6,000 shares of Gem Co. stock at $23.00 per share plus a $320 brokerage fee May 1 Paid $150,000 to buy 3-month U.S. Treasury bills (debt securities): $150,000 principal amount, 4% interest, gecuritie3 mature on uly 31. July 7 Purchased 3,000 shares of PepsiCo stock at $46.00 per share plus a $290 brokerage fee 20 Purchased 1,500 shares of Xerox stock at $20.00 per share plus a $370 brokerage fee Aug 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31 15 Received an $.80 per share cash dividend on the Gem Co. stock. 28 Sold 3,000 shares of Gem Co. stock at $29.75 per share less a $410 brokerage fee Oct. 1Received a $1.80 per share cash dividend on the PepsiCo shares Dec. 15 Received a $.95 per share cash dividend on the remaining Gem Co. shares. 31 Received a $1.05 per share cash dividend on the PepsiCo shares. 2. Prepare a table to compare the year-end cost and fair values of Rose's short-term investments in available-for-sale securities. The year-end fair values per share are: Gem Co., $25.25; PepsiCo, $43.25; and Xerox, $17.00 Comparison of Cost and Fair Values for AFS Portfolio Fair Value Unrealized Amount Cost Gem Co Pepsi Co Кеох Total Required information The following information applies to the questions displayed below] Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017. Apr. 16 Purchased 6,000 shares of Gem Co. stock at $23.00 per share plus a $320 brokerage fee. May 1 Paid $150,000 to buy 3-month U.S. Treasury bills (debt securities) : $150,000 principal amount, interest, securities mature on July 31. July 7 Purchased 3,000 shares of PepsiCo stock at $46.00 per share plus a $290 brokerage fee 20 Purchased 1,500 shares of Xerox stock at $20.00 per share plus a $370 brokerage fee Aug. 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 1. 15 Received an $.80 per share cash dividend on the Gem Co. stock. 28 Sold 3,000 shares of Gem Co. stock at $29.75 per share less a $410 brokerage fee Oct. 1Received a $1.80 per share cash dividend on the PepsiCo shares. Dec. 15 Received a $.95 per share cash dividend on the remaining Gem C · shares. 31 Received a $1.05 per share cash dividend on the PepsiCo shares. 3. Prepare an adjusting entry, if necessary, to record the year-end fair value adjustment for the portfolio of short-term investments in available-for-sale securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Part 1		Journal entries
Date		Description		Debit($)	Credit($)
2017
	Apr.16	Short Term investment AFS(GEM)		138,320
		Cash			138,320
	May-01	Short Term investment(Treasury)		150,000
		Cash			150,000
	Jul-07	Short Term investment AFS(Pepsi)		138,290
		Cash			138,290
	Jul-20	Short Term investment AFS(Xerox)		30,370
		Cash			30,370
	Aug-01	Cash		151,500
		Short Term investment AFS(Treaury)			150,000
		Interest Revenue			1,500
	Aug-15	Cash		4,800
		Dividend Revenue(6,000 shares*$0.80)			4,800
	Aug-28	Cash		89,660
		Short Term investment AFS(GEM)(3,000*23.00 + $160)			69,160
		Gain on sale of short term investment			20,500
	Oct-01	Cash		5,400
		Dividend Revenue(3,000 shares*$1.80)			5,400
	Dec-15	Cash		2,850
		Dividend Revenue(3,000 shares*$0.95)			2,850
	Dec-31	Cash		3,150
		Dividend Revenue(3,000 shares*$1.05)			3,150
Part 2		Computation of Cost and Fair value for AFS Portfolio
				Cost	Fair value	Unrealized Amount
		Gem Co.(3,000 shares*25.25)		$69,160	$75,750	$6,590-Gain
		Pepsi Co.(3,000 shares*43.25)		$138,290	$129,750	$8,540-Loss
		Xerox(1,500 shares*17.00)		$30,370	$25,500	$4,870-Loss
		Total		$237,820	$231,000	$6,820-Loss
Part 3		Description		Debit($)	Credit($)
		Unrealized Gain/(Loss)-Equity		$6,820
		Fair value Adjustment(AFS)			$6,820