Question

Yes Men, Inc. purchased 10,000 common shares of No Men Corp. common stock at $10 per...

Yes Men, Inc. purchased 10,000 common shares of No Men Corp. common stock at $10 per share on January 1, 2017 with cash. The security pays a $2.00 per share cash dividend at the end of each year. At December 31, 2017, the shares had a fair value of $12 per share and at the end of 2018 the shares had a fair value of $8 per share.

Required:

1. Prepare the journal entries to record the purchase of the shares and the receipt of the dividends received at the end of 2017 and 2018.

2. Assume Yes Men sold half of the shares for $9 per share on June 15, 2019. Prepare the journal entry to record the sale of the shares assuming the shares were accounted for as a trading security, and as an available-for-sale security.

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