The following securities are in Frederick Company's portfolio of long-term available-for-sale securities at December 31, 2021.
| Cost | |
| 1,000 shares of Willihite Corporation common stock | $52,000 |
| 1,400 shares of Hutcherson Corporation common stock | 84,000 |
| 1,200 shares of Downing Corporation preferred stock | 33,000 |
On December 31, 2021, the total cost of the portfolio equaled total fair value Frederick had the following transactions related to the securities during 2022.
| Jan. 20 | Sold all 1,000 shares of Willhite Corporation common stock at $55 per share. |
| 28 | Purchased 400 shares of $70 par value common stock of Liggett Corporation at $78 per share |
| 30 | Received a cash dividend of $1.15 per share of Hutcherson Corp. common stock. |
| Feb. 8 | Received a cash dividend of $0.40 per share on Downing Corp. preferred stock.. |
| 18 | Sell all 1.200 shares of Downing corp. preferred stock at $27 per share. |
| July 30 | Received cash dividend of $1 per share on Hutcherson Corp. Common Stock. |
| Sept. 6 | Purchased an additional 900 shares of $10 par value common stock of Liggett Corporation at $82 per share. |
| Dec. 1 | Received a cash dividend of $1.50 per share on Liggett Corporation Common Stock. |
At December 31, 2022 the fair value of the securities were.
| Hutcherson Corporation common stock | $64 per share |
| Liggett Corporation common stock | $72 per share |
Instructions
- Prepare journal entries to record the transactions.
- Post to the investment accounts. (Use T-accounts.)
- Prepare the adjusting entry at December 31, 2022 to report the portfolio at fair value.
- Show the balance sheet presentation at December 31, 2022, for the investment-related accounts
Solution
a.
Frederick Company
Journal Entries
Journal Entries
