Leon IncNeeds to Account for Investment Transactions During 2017:
Jan

question 127

Essay

Leon Inc.needs to account for investment transactions during 2017:
Jan. 15 Purchased 100 Bright Corporation common shares, paying $\$ 75$ per share.
Leon Inc, intends to hold the investment for an indefinite period and
has classified the investment as long-term investments. (No significant influence)

Jun. 30 Received a cash dividend of $\$ 1.50$ per share on the Bright Corporation common shares.
Dec. 31 In spite of management's long-term intentions, Leon sold the Bright Corporation common shares for $\$ 7,260$ .
Prepare journal entries for the above transactions.

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Definitions:

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits, small time deposits, and money market mutual funds.

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and other larger liquid assets.

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, aimed at controlling the money supply and banking stability.

M3

A measure of the money supply that includes M2 (cash, checking deposits, savings deposits, money market securities) plus large time deposits, institutional money market funds, and other large liquid assets.