Troy?s long-term available-for-sale portfolio at the start of this year consists of the following. Troy enters into

Question:

Troy?s long-term available-for-sale portfolio at the start of this year consists of the following.

Troy enters into the following transactions involving its available-for-sale debt securities this year.

Jan. 13 Sold one-fourth of the notes of Company S for $72,250.

Apr. 5 Purchased bonds of Company V for $133,875.

Sep. 2 Sold all of the bonds of Company T for $156,750.

Oct. 30 Purchased notes of Company X for $48,750.

The fair values at December 31 are R, $568,125; S, $234,345; V, $134,940; and X, $45,625.

Required

1. Prepare journal entries to record these transactions, including any necessary December 31 adjusting entry to record the fair value adjustment of the long-term investments in available-for-sale securities.

2. Determine the amount Troy reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

3. What amount of gains or losses on transactions relating to longterm investments in available-for-sale securities does Troy report on its income statement for this year?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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