The following securities are in Pascual Company’s portfolio of long-term available for- sale securities at December 31, 2010.
1,000 shares of Abel Corporation common stock ……… $52,000
1,400 share of Frey Corporation stock …………………… 84,000
1,200 shares of Weiss Corporation preferred stock ……… 33,600
On December 31, 2010, the total cost of the portfolio equaled total fair value. Pascual had the following transactions related to the securities during 2011.
Jan. 20 Sold 1,000 shares of Abel Corporation common stock at $55 per share less brokerage fees of $600.
28 Purchased 400 shares of $70 par value common stock of Rosen Corporation at $78 per share, plus brokerage fees of $480.
30 Received a cash dividend of $1.15 per share on Frey Corp. common stock.
Feb. 8 Received cash dividends of $0.40 per share on Weiss Corp. preferred stock.
18 Sold all 1,200 shares of Weiss Corp. preferred stock at $27 per share less brokerage fees of $360.
July 30 Received a cash dividend of $1.00 per share on Frey Corp. common stock.
Sept. 6 Purchased an additional 900 shares of $10 par value common stock of Rosen
Corporation at $82 per share, plus brokerage fees of $1,200.
Dec. 1 Received a cash dividend of $1.50 per share on Rosen Corporation common stock.
At December 31, 2011, the fair values of the securities were:
Frey Corporation common stock $64 per share
Rosen Corporation common stock $72 per share
Pascual Company uses separate account titles for each investment, such as ?oInvestment in Frey Corporation Common Stock.??
(a) Prepare journal entries to record the transactions.
(b) Post to the investment accounts. (Use T accounts.)
(c) Prepare the adjusting entry at December 31, 2011 to report the portfolio at fair value.
(d) Show the balance sheet presentation at December 31, 2011, for the investment-related accounts.