Question

Swifty Corporation purchased 400 common shares of Sigma Inc. for trading purposes for $12,800 on September 8 and accounted for the investment under ASPE at FV-NI. In December, Sigma declared and paid a cash dividend of $1.70 per share. At year end, December 31, Sigma shares were selling for $35.60 per share. In late January, Swifty sold the Sigma shares for $34.91 per share.

Prepare Swifty Corporation’s journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
September 8	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

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Prepare Swifty Corporation’s journal entry to record the dividends received. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
December 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

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Prepare Swifty Corporation’s journal entry to record the fair value adjustment at December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
December 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Show List of Accounts

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Prepare Swifty Corporation’s journal entry to record the January sale of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
January 31	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount

Answer 1

Date	Accounts Titles and Explanation	Debit	Credit
Sep 08	FV-NI Investments	$12,800
	Cash		$12,800
	(To record purchased of investment)
Dec 31	Cash (400 x $1.70)	$680
	Dividend Revenue		$680
	(To record Dividend Revenue )
Dec 31	FV-NI Investments [400 x $35.60 – 12,800]	$1,440
	Unrealized Holding Gain or Loss-Income		$1,440
	(To record fair value adjustment )
Jan 31	Cash ($34.91 x 400)	$13,964
	Loss on Sale of Investments	$276
	FV-NI Investments ($35.60 x 400)		$14,240
	(To record sale of investment)