Asked by Nomzamo Lubisi on Apr 27, 2024
Verified
On January 31,2018,McBurger Corporation purchased the following shares of voting common stock as long-term investments.None of these holdings amounted to more than 5% of the respective company's outstanding voting shares.The accounting period ends December 31.
All of the Bailey Corporation stock was sold for $13,500 on January 12,2020.
Prepare the required journal entries at the following dates: January 31,2018,December 31,2018,December 31,2019 and January 12,2020.
Voting Common Stock
Shares that give the shareholder the right to vote on corporate matters, such as electing the board of directors, at shareholder meetings.
Long-Term Investments
Assets that a company intends to hold for more than one year, such as stocks, bonds, real estate, and other securities.
Accounting Period
A specific period of time used for financial reporting purposes, which could be monthly, quarterly, or annually.
- Understand the variance in accounting treatments across different securities categories.
- Formulate the requisite journal entries for the procurement and divestiture of securities.
Verified Answer
December 31,2018:
December 31,2019:
January 12,2020:
Learning Objectives
- Understand the variance in accounting treatments across different securities categories.
- Formulate the requisite journal entries for the procurement and divestiture of securities.
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