Problem 165A The following securities are in Frederick Compa

Problem 16-5A The following securities are in Frederick Company\'s portfolio of long-term available-for-sale securities at December 31, 2017 Cost 1,000 shares of Willhite Corporation common stock 1,600 shares of Hutcherson Corporation common stock 1,500 shares of Downing Corporation preferred stock $55,000 96,000 42,000 ly On December 31, 2017, the total cost of the portfolio equaled total fair value. Frederick had the following transactions related to the securities during 2018 Jan. 20 Sold all 1,000 shares of Willhite Corporation common stock at $58 per share. 28 Purchased 340 shares of $71 par value common stock of Liggett Corporation at $79 per share. 30 Recelved a cash dividend of $1.45 per share on Hutcherson Corp. common stock. Feb. 8 Received cash dividends of $0.50 per share on Downing Corp. preferred stock. 18 Sold all 1,500 shares of Downing Corp. preferred stock at $27 per share. uly 30 Received a cash dividend of $1.00 per share on Hutcherson Corp, common stock Sept. 6 Purchased an additional 820 shares of $10 par value common stock of Liggett Corporation at $83 per share. Dec. 1 Recelved a cash dividend of $1.50 per share on Liggett Corporation common stock. At December 31, 2018, the fair values of the securities were: Hutcherson Corporation common stock $64 per share Liggett Corporation common stock $73 per share journal entries in the order presented in the problem.)

Solution

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Solution 3:

Journal Entries - Frederick Company
Date	Particulars	Debit	Credit
20-Jan	Cash Dr (1000*$58)	$58,000.00
	To Investment in Willhite Corporation		$55,000.00
	To Gain on sale of investment		$3,000.00
	(To record sale of investment)
28-Jan	Investment in Liggett Corporation Dr (340*$79)	$26,860.00
	To Cash		$26,860.00
	(To record purchase of investment)
30-Jan	Cash Dr (1600*$1.45)	$2,320.00
	To Dividend Revenue		$2,320.00
	(To record dividend receipt on Hutcherson Corporation common stock)
8-Feb	Cash Dr (1500*$.50)	$750.00
	To Dividend Revenue		$750.00
	(To record dividend receipt on Downing Corporation preferred stock)
18-Feb	Cash Dr (1500*$27)	$40,500.00
	Loss on sale of investment Dr	$1,500.00
	To Investment in Downing Corporation		$42,000.00
	(To record sale of investment)
30-Jul	Cash Dr (1600*$1)	$1,600.00
	To Dividend Revenue		$1,600.00
	(To record dividend receipt on Hutcherson Corporation common stock)
6-Sep	Investment in Liggett Corporation Dr (820*$83)	$68,060.00
	To Cash		$68,060.00
	(To record purchase of investment)
1-Dec	Cash Dr (1160*$1.50)	$1,740.00
	To Dividend Revenue		$1,740.00
	(To record dividend receipt on Liggett Corporation common stock)