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Monty Corporation made the following cash purchases of securities during 2017, which is the first...

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Accounting

Monty Corporation made the following cash purchases of securities during 2017, which is the first year in which Monty invested in securities. 1. On January 15, purchased 10,080 shares of Sanchez Companys common stock at $40.20 per share plus commission $2,060. 2. On April 1, purchased 5,080 shares of Vicario Co.s common stock at $62.40 per share plus commission $3,450. 3. On September 10, purchased 7,080 shares of WTA Co.s preferred stock at $31.80 per share plus commission $4,990. On May 20, 2017, Monty sold 4,080 shares of Sanchez Companys common stock at a market price of $42 per share less brokerage commissions, taxes, and fees of $3,930. The year-end fair values per share were Sanchez $36, Vicario $66, and WTA $33.60. In addition, the chief accountant of Monty told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for these stock purchases.

Prepare the journal entries to record the above three security purchases.

Prepare the journal entry for the security sale on May 20.

Compute the unrealized gains or losses.

Prepare the adjusting entries for Monty on December 31, 2017.

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