1. Use information given below to answer this question:
Nagen Company had these transactions pertaining to stock investments:
Feb. 1 bought 2,000 shares of Cagney Company (10%) for $33,200 cash plus brokerage fees of $800. June 1 Received cash dividends of $2 per share on Cagney stock. Oct. 1 Sold 800 shares of Cagney stock for $16,000 less brokerage fees of $400. Entry to record sale of the stock would comprise:
a. debit to Cash for $16,000.
b. credit to Gain on Sale of Stock Investments for $800.
c. debit to Stock Investments for $13,600.
d. credit to Gain on Sale of Stock Investments for $2,000.
2. On January 1, Barone Company bought as short-term investment a $1,000, 8% bond for $1,050. Bond pays interest on January 1 and July 1. Bond is sold on October 1 for $1,200 plus accrued interest. Interest has not been accrued since last interest payment date. Determine entry to record cash proceeds at the time the bond is sold?
a. 1
b. 2
c. 3
d. 4