A) On February 15, paid $160,000 cash to purchase American General's 90-day short-term notes at par, which are dated February 15th and pay 10% interest (classified as held-to-maturity)
B) On March 22, bought 700 shares of Fran Industries common stock at $51cash per share plus a $150 brokerage fee (classified as long- term available for sale securities)
C) on May 15, received a check from American General in payment of the principle and 90 days' interest on the notes purchased in transaction a
D) on July 30, paid $100,000 cash to purchase MP3 electronics' 8% notes at par, dated July 30, 2008, and maturing on January 30, 2009 (classified as trading securities)
E) on September 1, received a $1 per share cash dividend on the Fran Industries common stock purchased in transaction b
F) on October 8, sold 350 shares of Fran Industries common stock for $64 cash per share, less a $125 brokerage fee
G) On October 30 , received a check from MP3 electronics for three months' interest on the notes purchased in transaction D.
2) On December 31,2008. Lujack Co. held the following short term available for sale securities.
Cost Market Value
Nintendo Co. Common Stock 44,450 48,900
Atlantic Richfield Co. Bonds Payable 49,000 47,000
Kellogg Co. Notes Payable 25,000 23,200
McDonald’s Corp. common stock 46,300 44,800
Lujack had no short-term investments prior to the current period. Prepare the December 31, 2008, year end adjusting entry to record the market adjustment for these entries.
3) Pilsen Co. began operations in 2007. The cost and market values for it’s long term investments portfolio is available for sale securities are shown below. Prepare Pilsen’s December 31, 2008 adjusting entry to reflect any necessary market adjustment for these investments.
Cost Market Value
December 31, 2007 87,855 80,293
December 31, 2008 89,980 90,980
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