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On December 31, 2017, Short-Term Equity Securities with an Original

question 34

Essay

On December 31, 2017, short-term equity securities with an original cost of $10,000 have a carrying value on the balance sheet equal to their market value of $12,000. On January 11, 2018, those securities are sold for $15,000. Prepare the appropriate entry to record the sale of the securities.


Definitions:

Compounded Monthly

A process where interest earnings are calculated and added back to the main balance every month, aiding in the growth of the investment.

Annuity Payment

A periodic payment received from an annuity investment, typically for retirement income.

Final Payment

the last payment that completes the payoff of a loan or financial obligation.

Compounded Monthly

The method of calculating interest where the earned interest is added to the principal balance each month.

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