American Surety and Fidelity buys and sells securities expecting to earn profits on short-term differences in…

American Surety and Fidelity buys and sells securities expecting
to earn profits on short-term differences in price. For the first
11 months of 2018, gains from selling trading securities totaled $4
million, losses were $11 million, and the company had earned $5
million in investment revenue. The following selected transactions
relate to American’s trading account and equity securities
investment account during December 2018, and the first week of
2019. The company’s fiscal year ends on December 31. No trading
securities were held by American on December 1, 2018. 2018 Dec. 12
Purchased FF&G Corporation bonds for $21 million. 13 Purchased
2 million Ferry Intercommunications common shares for $26 million.
15 Sold the FF&G Corporation bonds for $21.9 million. 22
Purchased U.S. Treasury bills for $66 million and Treasury bonds
for $74 million. 23 Sold half the Ferry Intercommunications common
shares for $11 million. 26 Sold the U.S. Treasury bills for $69
million. 27 Sold the Treasury bonds for $72 million. 28 Received
cash dividends of $200,000 from the Ferry Intercommunications
common shares. 31 Recorded any necessary adjusting entry(s) and
closing entries relating to the investments. The market price of
the Ferry Intercommunications stock was $11 per share. 2019 Jan. 2
Sold the remaining Ferry Intercommunications common shares for
$11.4 million. 5 Purchased Warehouse Designs Corporation bonds for
$43 million. Prepare the appropriate journal entry for each
transaction or event during 2018. (If no entry is required for a
transaction/event, select “No journal entry required” in the first
account field. Enter your answers in millions rounded to 1 decimal
place, (i.e., 5,500,000 should be entered as 5.5).)
Part 2

($ in millions)

Balance sheet (short-term
investment):

Total
$0.0

Income statement:

Part 3
1. Record the entry to adjust to fair value on the date of sale
of the Ferry Intercommunications common shares
Note: Enter debits before credits.

Date
General Journal
Debit
Credit

January 02, 2019

2. Record the sale of the remaining Ferry Intercommunications
common shares for $11.4 million.
Note: Enter debits before credits.

Date
General Journal
Debit
Credit

January 02, 2019

3. Record the purchase of the Warehouse Designs Corporation
bonds for $43 million.
Note: Enter debits before credits.

Date
General Journal
Debit
Credit

January 05, 2019