A. On February 15, paid $130,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 6% interest (classified as held-to-maturity). b. On March 22, bought 1,000 shares of Fran Inc. common stock at $35 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran.
c. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part a.
d. On July 30, paid $39,000 cash to purchase MP Inc.'s 5% , six-month notes at par, dated July 30 (classified as trading securities).
e. On September 1, received a $0.42 per share cash dividend on the Fran Inc. common stock purchased in part b.
f. On October 8, sold 500 shares of Fran Inc. common stock for $41 cash per share.
g. On October 30, received a check from MP Inc. for three months’ interest on the notes purchased in part d.
Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. (Use 360 days in a year. Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

a. On February 15, paid $130,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 6% interest (classified as held-to-maturity).

Dr Investment in GMI's notes - HTM 130,000

    Cr Cash 130,000

b. On March 22, bought 1,000 shares of Fran Inc. common stock at $35 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran.

Dr Investment in Fran inc. stocks 35,000

    Cr Cash 35,000

c. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part a.

Dr Cash 131,950

    Cr Investment in GMI's notes - HTM 130,000

    Cr Interest revenue 1,950

d. On July 30, paid $39,000 cash to purchase MP Inc.'s 5% , six-month notes at par, dated July 30 (classified as trading securities).

Dr Trading securities - MP Inc.'s notes 39,000

    Cr Cash 39,000

e. On September 1, received a $0.42 per share cash dividend on the Fran Inc. common stock purchased in part b.

Dr Cash 420

    Cr Dividends revenue 420

f. On October 8, sold 500 shares of Fran Inc. common stock for $41 cash per share.

Dr Cash 20,500

    Cr Investment in Fran inc. stocks 17,500

    Cr Gain on investment 3,000

g. On October 30, received a check from MP Inc. for three months’ interest on the notes purchased in part d.

Dr Cash 487.50

    Cr Interest revenue 487.50

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b is the correct answer