Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry,

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Subject: Business    / Accounting

Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Roman Products, Inc., is a wholesaler of men’s hair products. The company began operations on January 1, 2014. The following transactions relate to securities acquired by Roman Products, Inc., which has a fiscal year ending on December 31:
2014
Jan. 3    Purchased 8,400 shares of Whalen Inc. as an available-for-sale security at $48 per share, including the brokerage commission.
July 8    Received a cash dividend of $0.45 per share on the Whalen stock.
Oct. 19    Sold 3,800 shares of Whalen Inc. stock at $52 per share, less a brokerage commission of $30.
Dec. 12    A cash dividend of $0.45 per share was received on the Whalen stock.
Dec. 31    Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $45 per share.
Use the valuation allowance for available-for-sale investments account in making the adjustment.
2015
Jan. 5    Purchased an influential interest in Tasmania Inc. for $730,000 by purchasing 52,500 shares directly from the
estate of the founder of Tasmania Inc. There are 150,000 shares of Tasmania Inc. stock outstanding.
July 9    Received a cash dividend of $0.55 per share on Whalen Inc. stock.
Dec. 8    Received a cash dividend of $0.55 per share plus an extra dividend of $0.10 per share on Whalen Inc. stock.
Dec. 31    Received $22,000 of cash dividends on Tasmania Inc. stock. Tasmania Inc. reported net income of $90,000 in 2015.
Roman Products uses the equity method of accounting for its investment in Tasmania Inc.
Dec. 31    Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $52 per share. Use the valuation
allowance for available-for-sale investments account in making the adjustment for the change in fair value from $45 to $52 per share.

Required:

1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry,

 

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