Question

Kampus Corporation had the following eight investment transactions or events:

Jan 1    Purchased Argon Co. bonds for $10,000 cash. (Purchase is considered a short-term investment in available-for-sale (AFS) debt securities.)

Jan 3    Purchased 1,200 shares of Elmer, Inc. for $36,000 cash. (Purchase is considered a long-term stock investment with insignificant influence.)

Mar 31    Received cash dividend of $0.25 per share from Elmer, Inc.

Jun 1    Purchased 5,000 shares of Logan, Inc. for $60 per share. These shares represent a 40% ownership in Logan, Inc.

Sep 30    Received cash dividend of $2 per share from Logan, Inc.

Dec 31    Logan, Inc. reported net income of $150,000 for the year.

Dec 31    As of December 31, the Argon Co. bond had a fair (market) value of $12,000.

Dec 31    As of December 31, the Elmer, Inc. stock had a fair (market) value of $25 per share.

Required: Prepare the journal entries Kampus Corporation should record for these transactions and events. (You do not need to add explanations under each entry.)

There are ONLY 5 account names used for the investment securities discussed in Chapter 15. They are "Debt Investments - Trading", "Debt Investments - AFS", "Debt Investments - HTM", "Stock Investments", and "Equity Method Investments". So, please do not use any investment accounts titled "Short-term Investments", "Long-term Investments", "Investments in Securities", "Investments in Bonds", etc.

Answer 1

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