Asked by Kennedy Ellison on Apr 29, 2024
Verified
On April 1 Sign Company buys 4000 shares of Polk common stock for $61500. On October 1 Sign sells 1000 shares of Polk stock for $20500..
Instructions
Prepare journal entries for the purchase and sale of the Polk common stock.
Polk Common Stock
A fictional example, likely referring to shares of common stock issued by a company named "Polk."
Purchase
The act of buying goods or services, often reflected in the financial transactions of a business.
Sale
A transaction between two parties where the buyer receives goods, services, or assets in exchange for money.
- Compute and record in journals the profits, losses, dividends collected, and income from interest on investments.
- Document activities associated with buying, selling, and maintaining investment securities, as well as making adjustments for their fair value.
Verified Answer
JR
Joshua RodriguezApr 30, 2024
Final Answer :
Apr. 1Stock Investments 61,500Cash 61,500Oct. 1Cash 20,500 Stock Investments ($61,500×1/4) 15,375 Gain on Sale of Stock Investments5,125\begin{array}{llr} \text { Apr. 1\quad Stock Investments } &61,500\\\quad\quad\quad\quad \text {Cash } &&61,500\\\\ \text {Oct. 1\quad Cash } &20,500\\ \quad\quad\quad\quad\text { Stock Investments \( (\$ 61,500 \times 1 / 4) \) } &&15,375\\\quad\quad\quad \text { Gain on Sale of Stock Investments} &&5,125\\\end{array} Apr. 1Stock Investments Cash Oct. 1Cash Stock Investments ($61,500×1/4) Gain on Sale of Stock Investments61,50020,50061,50015,3755,125
Learning Objectives
- Compute and record in journals the profits, losses, dividends collected, and income from interest on investments.
- Document activities associated with buying, selling, and maintaining investment securities, as well as making adjustments for their fair value.
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