Hiker Company completes the following transactions during th

Hiker Company completes the following transactions during the current year Hay 9 Purchases s00 shares of Higo stock as a short-term investment in available-for-sale securities at a cost of 55 pen plus $190 in broker fees June 2 Sells 150 shares of its investment in Higo stock at $38 pe Dec. 31 The closing market price (fair value) of the Higo stock is $33 per share. r share. The broker\'s commission on this sale is $110 repare the May 9 and June 2 journal entries and the December 31 adjusting entry This is the first and only time the company purchased such securities. (If no entry is required for a transaction/event, field.) select \"No journal entry required\" in the first account

Solution

Journal Entries: Date Accounts Titles Debit $ Credit $ 9-May Available for sale securities 10690 Cash 10690 (Being purchase of available for sale@35 + brokerage $190) 2-Jun Cash 5590 Available for sale securities 5250 (150*35) Income on sale of securities 340 (being 150 shares sold @ 38 minus brokerage 110) 31-Dec Fair Value adjustment 300 Available for sale securities 300 (being adjustment for fair value @ 33-35)