Problem
During January 2014, Optimum Glass Company purchased the following securities as its long-term available-for-sale securities investment portfolio:
D Corporation Common Stock: 12,500 shares (95,500 outstanding) at $9 per share
F Corporation Bonds: $306,000 (15-year, 5 percent) purchased at par (not to be held to maturity)
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2014
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2015
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Net income reported at December 31:
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D Corporation
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35,000
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45,000
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F Corporation
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367,000
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555,000
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Dividends and interest paid during the year:
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D Corporation common stock cash dividends (per share)
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0.50
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0.60
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F Corporation bonds interest
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15,300
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15,300
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Fair value at December 31:
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D Corporation common stock (per share)
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8.00
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9.50
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F Corporation bonds
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265,000
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275,000
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Above is the information given. I need help recording journal entries as follows:
• Record the 2014 purchase of 12,500 shares of D Corporation common stock for $9 per share and $306,000 of F corporation bonds at par.
• Record the 2015 journal entry related to the 2014 purchase of the investments.
• Record the income reported by D Corporation of $35,000 and by F Corporation of $367,000 in 2014.
• Record the income reported by D Corporation of $45,000 and by F Corporation of $555,000 in 2015.
• Record the fair value effects at 2014 year-end when D Corporation common stock is selling at $8.00 per share and F Corporation bonds are selling for $265,000.
• Record the fair value effects at 2015 year-end when D Corporation common stock is selling at $9.50 per share and F Corporation bonds are selling for $275,000.