Here is Kalvin Company’s of long-term stock investments at December 31, 2018, the end of its first year of operations.
______________________________________________________Cost
1,400 shares of Batone Inc. common stock……………………….$73,500
1,200 shares of Mendez common stock………………84,000
800 shares of P. Tillman preferred stock……………..33,600
On December 31, the total cost of the equaled the total fair value. Kalvin had the following transactions related to the securities during 2019.
Jan. 20 Sold 1,400 shares of Batone Inc. at $55 per share.
28 Purchased 400 shares of $10 of P. Wahl at $78 per share.
30 Received a cash of $1.25 per share on Mendez common stock.
Feb. 8 Received cash dividends of $0.40 per share on P. Tillman preferred stock.
18 Sold all 800 shares of P. Tillman preferred stock at $35 per share.
July 30 Received a cash of $1.10 per share on Mendez common stock.
Sept. 6 Purchased an additional 600 shares of the $10 of P. Wahl at $82 per share.
Dec. 1 Received a cash of $1.50 per share on P. Wahl common stock.
At December 31, 2019, the fair values of the securities were:
Mendez $65 per share
P. Wahl $77 per share
Kalvin uses separate account titles for each investment, such as Investment in Mendez Common Stock.
Instructions
(a) Prepare journal entries to record the transactions.
(b) Prepare the adjusting entry at December 31, 2019, to report the at fair value.
(c) Show the presentation at December 31, 2019.
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