Harter Company, which began operations in 2009, invests its idle cash in trading securities. The following transactions relate to its short-term investments in its trading securities.2009Mar. 10...

Harter Company, which began operations in 2009, invests its idle cash in trading securities. The following transactions relate to its short-term investments in its trading securities. 2009 Mar. 10 Purchased 900 shares of Timex at $28.00 per share plus a $125 commission. May 7 Purchased 2,500 shares of MTV at $37.00 per share plus a $578 commission. Sept. 1 Purchased 780 shares of UPS at $7.00 per share plus a $200 commission. 2010 Apr. 26 Sold 2,500 shares of MTV at $35.50 per share less a $295 commission. Apr. 27 Sold 780 shares of UPS at $10.50 per share less a $103 commission. June 2 Purchased 1,600 shares of SPW at $34.00 per share plus a $444 commission. June 14 Purchased 1,600 shares of Wal-Mart at $20.00 per share plus a $290 commission. 2011 Jan. 28 Purchased 3,400 shares of PepsiCo at $38.00 per share plus a $400 commission. Jan. 31 Sold 1,600 shares of SPW at $29.00 per share less a $250 commission. Aug. 22 Sold 900 shares of Timex at $26.25 per share less a $420 commission. Sept. 3 Purchased 1,500 shares of Vodaphone at $47.50 per share plus a $600 commission. Oct. 9 Sold 1,600 shares of Wal-Mart at $22.50 per share less a $309 commission. Required 1. Prepare journal entries to record these short-term investment activities for the years shown. (Ignore any year-end adjusting entries.) 2. On December 31, 2011, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities when PepsiCo’s share price is $36.00 and Vodaphone’s share price is $44.00. (Assume the Fair Value Adjustment—Trading account had an unadjusted balance of zero.) View Solution:

Harter company which began operations in 2009 invests its idle