Slip Systems had no short-term investments prior to 2013. It had the following transactions involving short-term investments in available-for-sale securities during 2013.

Required 1. Prepare journal entries to record the preceding transactions and events.
2. Prepare a table to compare the year-end cost and fair values of the short-term investments in available-for-sale securities. The year-end fair values per share are; Nokia, $40.25; Dell, $40.50; and Merck, $59.
3. Prepare an adjusting entry, if necessary, to record the year-end fair value adjustment for the portfolio of short-term investments in available-for-sale securities.
Anaiysis Component 4. Explain the balance sheet presentation of the fair value adjustment to 81ip’s short-term investments.
5. How do these short-term investments affect

(a) its income statement for year 2013 and {b) the equity section of its balance sheet at the 2013 year-end?

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Feb. 6 Purchased 3,400 shares of Nokia stock at $41.25 per share plus a $3,000 brokerage fee. 15 Paid $20,000 to buy six-month U.S. Treasury bills (debt securities): $20,000 principal amount, 6% interest, securities dated February 15. Apr. 7 June 2 Purchased 1,200 shares of Dell Co. stock at $39.50 per share plus a $1,255 brokerage fee. Purchased 2,500 shares of Merck stock at $72.50 per share plus a $2,890 brokerage fee. 30 Received a $0.19 per share cash dividend on the Nokia shares. Aug. 11 Sold 850 shares of Nokia stock at $46 per share less a $1,050 brokerage fee. 16 Received a check for principal and accrued interest on the U.S. Treasury bills purchased February 15. 24 Received a $0.10 per share cash dividend on the Dell shares. Nov. 9 Received a $0.20 per share cash dividend on the remaining Nokia shares. Dec. 18 Received a $0.15 per share cash dividend on the Dell shares.