Prepare Journal Entries to Record the Following Transactions Associated with at Fair

question 2

Essay

Prepare journal entries to record the following transactions associated with at fair value through other comprehensive income investments purchased by Spark Spread Corporation during 2015 Spark Spread Corporation had no investments prior to 2015.
a.Purchased 1,500 shares of Mercury Coal Corporation common shares for $27.50 per share.
b.Mercury Coal Corporation pays a $1.25 per share dividend to all common shareholders.
c.On December 31,2015,the market price of Mercury Coal Corporation stock is $28.00 per share.

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Definitions:

Financially Unsound Contract

A contract deemed as high-risk due to the financial instability or inability of one or more parties to fulfill their obligations.

Relieved from Performance

A legal condition where a party is released from fulfilling their obligations under a contract due to unforeseen circumstances.

Perfect Tender Rule

The perfect tender rule is a principle in sales law that allows a buyer to reject goods delivered by a seller if they do not meet all contract specifications.

Substantial Deviations

Major divergences or departures from a set path, standard, or expected norm.