Credit Company purchases 1,000 shares of Microsoft Corporation stock at $35 per share on July 31. The company expects to hold the stock for 6 months and then sell it. At December 31, the market price of the stock is $42 per share.
1. What type of investment is this for Credit Company? Explain your answer.
2. Journalize the purchase on July 31 and the necessary adjustment on December 31.
3. Discuss how Credit Company would report this investment on its balance sheet at December 31 and any gain or loss on its income statement for the year ended December 31.

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The Answer of Credit Company purchases 1,000 shares of Microsoft Corporation stock at $35 per share on July 31. The company expects to hold the stock for 6 months and then sell it. At December 31, the market price of the stock is $42 per share.
1. What type of investment is this for Credit Company? Explain your answer.
2. Journalize the purchase on July 31 and the necessary adjustment on December 31.
3. Discuss how Credit Company would report this investment on its balance sheet at December 31 and any gain or loss on its income statement for the year ended December 31.

Credit Company Purchases 1,000 Shares of Microsoft Corporation Stock at $35