jennagrabowski7933
30.11.2020 •
Business
On March 10, 2019, Dearden, Inc., purchased 11,200 shares of Jaffa stock for $47 per share as a long-term passive investment. Dearden’s year ends on December 31. The following information pertains to the price per share of Jaffa stock:
Price
12/31/2019 $45
12/31/2020 48
12/31/2021 44
Dearden sold all of the Jaffa stock on September 12, 2022, at a price of $42 per share. Prepare any journal entries that are required by the facts presented in this case.
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Ответ:
Dearden, Inc.
Journal Entries to record the transactions:
March 10, 2019:
Debit Investment in Jaffa $526,400
Credit Cash $526,400
To record the purchase of 11,200 shares at $47 per share.
December 31, 2019:
Debit Loss on Investment $22,400
Credit Investment in Jaffa $22,400
To record the loss on investment from $47 to $45 per share.
December 31, 2020:
Debit Investment in Jaffa $33,600
Credit Gain on Investment $33,600
To record the gain on investment from $45 to $48 per share.
December 31, 2021:
Debit Loss on Investment $44,800
Credit Investment in Jaffa $44,800
To record the loss on investment from $48 to $44 per share.
September 12, 2022:
Debit Loss on Investment $22,400
Credit Investment in Jaffa $22,400
To record the loss on investment from $44 to $42 per share.
Debit Cash Account $470,400
Credit Investment in Jaffa $470,400
To record the sale of the investment in Jaffa at $42 per share.
Explanation:
For Dearden, Inc. journal entries are recorded on the acquisition date to record the purchase of the investment in Jaffa. Records are also made every December 31 to record the movements in the share price of the investment. Finally, on the date of disposal, records are also made to record the sale of the investment.
Ответ: