Wilbur Company often invests in the debt and equity securi
Question and Solution
Wilbur Company often invests in the debt and equity securities of other companies as short-term investments. During 2012, the following events occurred: July 1 Wilbur purchased the securities listed here:
Sept. 30 Wilbur received a cash dividend of $2,460 on Security 2. Dec. 1 Wilbur sold Security 4 for $18,300. 31 Wilbur received interest of $4,300 on Security 1. 31 The market prices were quoted as follows: Security 1, $40,900; Security 2, $25,550; Security 3, $44,000. Required: 1. Prepare journal entries to record the events. 2. Illustrate how these investments would be reported on the balance sheet at December 31. 3. What items and amounts would be reported on the income statement for theyear?