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The information below relates to Milton Company's trading securities in 2010 and 2011.

(a) Prepare the journal entries for the following transactions.

May 1, 2010 Purchased $250,000 par value of GLF Company bonds at 97 plus accrued interest. The bonds pay interest annually at 9% each December 31. Broker's commission was $2,500.

September 1, 2010 Sold $125,000 par value of GLF Company bonds at 94 plus accrued interest. Broker's commission, taxes, and fees were $1,250.

September 5, 2010 Purchased 5,000 shares of Hayes, Inc. common stock for $25 per share. The broker's commission on the purchase amounted to $2,000.

December 31, 2010 Make the appropriate entry for the GLF Company bonds.

December 31, 2010 The market prices of the trading securities at December 31 were: Hayes, Inc. common stock, $26 per share; and GLF Company bonds, 99. Make the appropriate entry.

July 1, 2011 Milton sold 1/2 of the Hayes, Inc. common stock at $27 per share. Broker's commissions, taxes, and fees were $1,000.

December 1, 2011 Milton purchased 600 shares of Ramirez, Inc. common stock at $40 per share. Broker's commission was $500.

December 31, 2011 Make the appropriate entry for the GLF Company bonds.

December 31, 2011 The market prices of the trading securities at December 31 were: Hayes, Inc. common stock, $28 per share; GLF Company bonds, 98; and Ramirez, Inc. common stock, $42 per share. Make the appropriate entry.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9402919

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