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How to Journalize a Common Stock Accounting Entry?


"Sold 500 shares of common stock that was a short term investment. The Stock sold for 14 3/4, less a commission of $147.75. The stock was originally purchased as a block of 1,000 shares at a total cost (including commission) of $9,250.00"

Whoever gets it right gets a big pat on the back from me!

When the purchase was made, the journal entry would have been:
dr marketable securities 9,250.00
(purchase 1000 shares of common stock)
cr cash 9,250.00

Terms of sale:
(14.75 )(500) = 7,375.00 - 147.75 = 7,227.25
500 shares sold = 500 / 1000 = (.5)(9,250.) = 4,625.00

journal entry for sale:
dr cash 7,227.25
cr marketable securities 4,625.00
(500 shares of common stock)
cr gain on sale of investments 2,602.25

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