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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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On January 1, 2019, Seminole Inc. purchased 300 shares of Cornett Company common stock at $40 per share. Prepare the January 1 journal entry to record the purchase of these equity securities.

To determine

Record the journal entry for the purchase of the equity securities as on January 1.

Explanation

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Record the journal entry for the purchase of the equity securities as on January 1.

DateAccount Title and ExplanationDebit  ($)Credit ($)
January 1Investment in equity securities (1)12,000 
     Cash 12,000
 (To record the investment made in equity securities)  

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