Prepare Hertog Company’s journal entries to reflect the following transactions for the current year. May 7 Purchases 200 shares of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees. June 6 Sells 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150.
Short-term Investments—Trading (Kraft)?
Gain on sale of short-term investments ?

Explanation:

Prepare Hertog Company’s journal entries to reflect the following transactions for the current year.

1. May 7 Purchases 200 shares of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees.

Dr Short Term Investments10,000

Dr Broker Fess300

Cr. Cash10,300

Being purchase of 200 shares of Kraft stock as a short-term investment in trading securities at a cost of $50 per share plus $300 in broker fees

2. June 6 Sells 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150.

Dr Cash11,050

Dr Broker Fess150

Cr. Cash10,000

Cr. Gain on Sale of Short-term investments1,200

Being Sale of 200 shares of its investment in Kraft stock at $56 per share. The broker’s commission on this sale is $150

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