Bridgeport Company buys and sells securities expecting to make money

Bridgeport Company buys and sells securities expecting to make money on short-term price movements. The company’s fiscal year ends on December 31. The following transactions relating to Bridgeport’s trading accounts occurred during December 2018 and the first week of 2019.

2018

December 3: Purchased 100,000 shares of VMWare Corporation’s common stock at $80 per share.

December 7: Purchased 150,000 shares of Intel Corporation’s common stock at $20 per share.

December 24: Received cash dividends of $0.10 per share from the Intel common stock.

December 31: Recorded any necessary adjusting entries relating to the VMWare and Intel shares. The market prices for VMWare and Intel were $77 per share and $23.50 per share respectively.

2019

January 2: Sold the 100,000 shares of VMWare common stock at $75 per share.

January 4: Sold the 150,000 shares of Intel common stock at $22 per share.

Required:

1. Prepare the appropriate journal entry for each transaction.

2. Indicate any amounts Bridgeport Company would report in its 2018 balance sheet and income statement as a result of these investments.

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