18. Jault Aircraft Corporation acquired the following equity investments at the beginning of year 1 to be held in an available-for-sale portfolio. (Click the icon to view the equity investments.) Share prices at the end of years 1 and 2 are presented below. 2 (Click the icon to view the share prices at the end of years 1 and 2.) Read the requirements Requirement a. Prepare the journal entry to record the acquisition of the investments. (Prepare a single compound entry. Record debits first, then credits. Exclude explanations from any journal entries.) Account Available-for-Sale Equity Investments Cash Acquisition 8,048,000 8,048,000 Requirement b. Prepare the journal entry to record the end of year 1 adjusting entry for the available-for-sale portfolio. (Prepare a single compound entry. Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) December 31, Year 1 Account (1) Unrealized Gain/Loss - Other Comprehensive Income (2) Fair Value Adjustment-Available-for-Sale Equity Investments Requirement C. Assume that Jault sells 20,000 Yancy shares for $17 per share at the beginning of year 2. Prepare the journal entry required to record the sale. Jault does not adjust the fair value adjustment account at this time. (Prepare a single compound entry. Record debits first, then credits. Exclude explanations from any journal entries.) Beginning of Year 2 Account (5) (8) Requirement d. Prepare the journal entry to record the year 2 adjusting entry. (Prepare a single compound entry. Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account December 31, Year 2 (10) (12) 1: Data Table Description Number of shares Riley Group 104,500 Bayer Brothers 92,000 Yancy Associates 43,000 x $ 15 Lawson Company 69,000 x $ 20 Market price per share 69 $ 2,090,000 $ 552,000 $ 645,000 $ 4,761,000 Share acquisition price 2: Data Table Riley Bayer Brothers Lawson Company Fair Value End of year 1 End of year 2 G $ $ roup 22 $ 19 $ Yancy Associates 16 $ 1$ 18 $ 3$ 3: Requirements a. b. c. Prepare the journal entry to record the acquisition of the investments Prepare the journal entry to record the end of year 1 adjusting entry for the available-for-sale portfolio. Assume that Jault sells 20,000 Yancy shares for $17 per share at the beginning of year 2. Prepare the journal entry required to record the sale. Jault does not adjust the fair value adjustment account at this time. Prepare the journal entry to record the year 2 adjusting entry. d. Interest Expense O Interest Payable Interest Receivable Interest Revenue (1) O Available-for-Sale Equity Investments Cash Fair Value Adjustment-Available-for-Sale Equity Investments O Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue (2) O Available-for-Sale Equity Investments Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income (3) O Interest Expense Interest Payable Interest Receivable Interest Revenue O Available-for-Sale Equity Investments O Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income (4) Available-for-Sale Equity Investments O Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense O Interest Payable O Interest Receivable O Interest Revenue Interest Expense O Interest Payable Interest Receivable Interest Revenue Available-for-Sale Equity Investments O Cash Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income (6) O Available-for-Sale Equity Investments O Cash Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue (7) O Available-for-Sale Equity Investments Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue (8) O O Available-for-Sale Equity Investments O Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue Interest Expense O Interest Payable Interest Receivable Interest Revenue (9) O Available-for-Sale Equity Investments Cash Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue (10) Available-for-Sale Equity Investments Cash Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income O Realized Gain/Loss - Other Comprehensive Income O Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income Interest Expense O Interest Payable Interest Receivable Interest Revenue (11) O O Available-for-Sale Equity Investments Cash O Fair Value Adjustment-Available-for-Sale Equity Investments Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss Other Comprehensive Income Interest Expense Interest Payable Interest Receivable Interest Revenue (12) O Available-for-Sale Equity Investments Cash O Fair Value Adjustment-Available-for-Sale Equity Investments O Realized Gain/Loss - Net Income Realized Gain/Loss - Other Comprehensive Income Unrealized Gain/Loss - Net Income Unrealized Gain/Loss - Other Comprehensive Income