Asked by Cristina Elena on Jun 14, 2024
Verified
On April 25 Davis Company buys 4200 shares of Carter common stock for $94500. On October 31 Davis sells 600 shares of Carter stock for $16500. Prepare journal entries for the purchase and sale of the Carter common stock.
Common Stock
A type of security that represents ownership in a corporation, with holders entitled to vote on corporate matters and receive dividends.
Journal Entries
Records of financial transactions in the accounting system, marked by debits and credits to maintain the balance of accounts.
- Attain proficiency in the accounting techniques and journal entry processes for equity and debt investment acquisitions.
- Recognize the implications of offloading fractions of investments, which involves determining financial gains or setbacks.
Verified Answer
SO
Sammy OrtizJun 15, 2024
Final Answer :
April 25Stock Investments 94,500 Cash 94,000 Oct. 31Cash18,500 Stock Investments ($94,500×600/4,200) 13,500 Gain on Sale of Stock Investments 3,000\begin{array}{llr} \text {April 25\quad Stock Investments } &94,500\\\quad\quad\quad\quad \text { Cash } &&94,000\\\\ \text { Oct. 31\quad Cash} &18,500\\\quad\quad\quad\quad \text { Stock Investments \( (\$ 94,500 \times 600 / 4,200) \) } &&13,500\\\quad\quad\quad\quad \text { Gain on Sale of Stock Investments } &&3,000\\\end{array}April 25Stock Investments Cash Oct. 31Cash Stock Investments ($94,500×600/4,200) Gain on Sale of Stock Investments 94,50018,50094,00013,5003,000
April 25Stock Investments 94,500 Cash 94,000 Oct. 31Cash18,500 Stock Investments ($94,500×600/4,200) 13,500 Gain on Sale of Stock Investments 3,000\begin{array}{llr} \text {April 25\quad Stock Investments } &94,500\\\quad\quad\quad\quad \text { Cash } &&94,000\\\\ \text { Oct. 31\quad Cash} &18,500\\\quad\quad\quad\quad \text { Stock Investments \( (\$ 94,500 \times 600 / 4,200) \) } &&13,500\\\quad\quad\quad\quad \text { Gain on Sale of Stock Investments } &&3,000\\\end{array}April 25Stock Investments Cash Oct. 31Cash Stock Investments ($94,500×600/4,200) Gain on Sale of Stock Investments 94,50018,50094,00013,5003,000
Learning Objectives
- Attain proficiency in the accounting techniques and journal entry processes for equity and debt investment acquisitions.
- Recognize the implications of offloading fractions of investments, which involves determining financial gains or setbacks.
Related questions
Quagle Company Had the Following Transactions Pertaining to Debt Investments ...
On January 1 Jarret Corporation Purchased a 35% Equity in ...
On January 5 2017 Grouse Company Purchased the Following Stock \(\$ ...
On January 1 Sanchez Corporation Purchased a 35% Equity Interest ...
On February 1 Brutus Company Purchased 1000 Shares (2% Ownership) ...