Question

Jackson Company engaged in the following investment transactions during the current year.

Feb 17,Purchased  430 shares of Medical Company common stock for  $15 per share plus a brokerage commission of  $150. Jackson does not have significant influence over Medical and it is closed as trading securities.

April 1st. Bought  23,000 of the  100,000 outstanding shares of Olde Company for  $230,000. Goodwill of  $73,000 was included in the price. Jackson has significant influence.

June 25 Received a  $1.30 per share dividend on Medical Company stock.

June 30, Olde Company reported second-quarter profits of  $13,000 and dividends $.50 per share.

July 30 Purchased  1300 bonds of Alpha Company for  $14 per bond plus a brokerage fee of  $330. These bonds are classified as available for sale securities.

Dec 31 Medical Co. shares are selling for  $20 .

Required:

Prepare the appropriate journal entries to record the transactions for the year including year-end adjustments. (If no entry is required for a transaction/event, enter "No journal entry required" in the first account field.)

Answer 1

	Journal Entries
S.No	Date	Particulars	Dr	Cr
1	17-Feb	Trading Securties A/c	6450
		Brokerage A/c	150
		TO Bank A/c	6600
		( Being Medical Company Share purchased)
2	1-Apr	Investment in Olde Company A/c	157000
		Goodwill	73000
		TO Bank A/c	230000
		( Being Olde Company Share purchased)
3	25-Jun	Bank A/c	559
		To Trading Securties	559
4	30-Jun	Bank A/c	11500
		To Dividend Income	11500
5	30-Jul	Bonds A/c	18200
		Brokerage A/c	330
		To Bank A/c	18530
6	31-Dec	No Journal Entry required