Rantzow-Lear Company buys and sells securities expecting to earn profits on short-term differences in price. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2012 and the first week of 2013.
purchaused 175,000 Grocer's Supply Corporation preferred share received cash dividends of $5,000 from the grocer's supply corporation preferred shares recorded any necessary adjusting entry relating to the Grocers's Supply Corporationprefferrd shares. The market price of the stock was $4 per share.sold the grocer's supply corporation preferred shares for $665,000.
Required:
1. Prepare the appropriate journal entry for each transaction (Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation preferred shares. The market price of the stock was $4 per share.)
2 Prepare the appropriate journal entries for 2014 transactions. (Recorded any necessary adjusting entry relating to the Grocers' Supply Corporation preferred shares. The market price of the stock was $4 per share.)
2. Inficate any amounts that Rantzow-Lear Company would report in its 2012 balance sheet and income statement as a result of this investment.