Problem
In January 2015, the management of Kinzie Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred. At December 31, the fair value of the Muninger common stock was $55 per share. The fair value of the Tatman common stock was $24 per share.
A. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Post in T-account form.)
B. Prepare the adjusting entry at December 31, 2015, to report the investments at fair value. All securities are considered to be trading securities.
C. Show the balance sheet presentation of investments at December 31, 2015.
D. Identify the income statement accounts and give the statement classification of each account.