Textbook Problem

Equity Securities The investment manager of 4th National Bank invests some of the bank’s financial resources in equity securities. During the last quarter of 2019, the following transactions occurred in regard to these equity securities:

On December 31, 2019, the market values of the shares were as follows: Morgan, $87 per share; Parker, $61 per share; and Tathem, $37.25 per share. The bank held no equity securities at the beginning of the last quarter of 2019.

Required:

1. 1. Prepare journal entries to record the preceding information.
2. 2. Show what the bank reports on its fourth quarter 2019 income statement for these equity securities.
3. 3. Show how the bank reports these equity securities on its December 31, 2019, balance sheet.