Prepare journal entries to record the preceding information

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Reference no: EM131198226

Available-for-Sale Securities At the end of 2006 Terry Company prepared the following schedule of investments in available-for-sale securities (common stock):

Cumulative

Security

Cost

12/31/06

Fair Value

Change in

Fair Value

M

$37,000

$34,200

$(2,800)

N

42,000

43,100

1,100

Totals

$79,000

$77,300

$(1,700)


During 2007, the following transactions occurred:
•June 8 Purchased O securities (common stock) for $50,000
•Oct. 11 Sold all of the M securities for $35,400
•Dec. 31 Received dividends of $900 on the N and O securities, and the following year-end total market values were available: N common stock, $43,900; O common stock, $49,600

Required
1. Prepare journal entries to record the preceding information.

2. Show how the preceding items are reported on the December 31, 2007 balance sheet of the Terry Company. Assume all investments are noncurrent.

Reference no: EM131198226

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