Exercise $15-15($Algo$)$ Classifying investments in securities; recording fair values LO C$1,$ P$2,$ P$3,$ P$4,$ P$5$

The following information shows Carperk Company's individual investments in securities during its current year, along with the December $31$ fair values.

a$.$ Investment in Brava Company bonds: $$426,600$ cost; $$463,714$ fair value. Carperk intends to hold these bonds until they mature in $5$ years.

b$.$ Investment in Baybridge common stock: $29,500$ shares; $$339,147$ cost; $$368,653$ fair value. Carperk owns $32\%$ of Baybridge's voting stock and has a significant influence over Baybridge.

c$.$ Investment in Duffa bonds: $$174,906$ cost; $$188,549$ fair value. This investment is not readily marketable and is not classified as held$-$to$-$maturity or trading.

d$.$ Investment in Newton notes: $$97,265$ cost; $$95,611$ fair value. Newton notes are not readily marketable and are not classified as held$-$to$-$maturity or trading.

e$.$ Investment in Farmers common stock: $16,300$ shares; $$106,650$ cost; $$113,262$ fair value. This $ stock is marketable, and Carperk intends to sell it within the year. This stock investment results in Carperk having an insignificant influence over Farmers.

Required:

Identify whether each investment should be classified as a short$-$term or long$-$term investment. For each investment, indicate in which of the six investment classifications it should be placed.

Prepare a journal entry dated December $31$ to record the fair value adjustment for the portfolio of available$-$for$-$sale debt securities$.$ Carperk had no available$-$for$-$sale debt securities prior to this year.

Required:

Identify whether each investment should be classified as a short$-$term or long$-$term investment. For each investment, indi which of the six investment classifications it should be placed.

Prepare a journal entry dated December $31$ to record the fair value adjustment for the portfolio of available$-$for$-$sale debt securities$.$ Carperk had no available$-$for$-$sale debt securities prior to this year.

Complete this question by entering your answers in the tabs below.

Required $2$

Identify whether each investment should be classified as a short$-$term or long$-$term investment. For each investment, indicate in which of the six investment classifications it should be placed.

$\backslash$table$[[,$Type of Investment,Classification of Long$-$term Investment$],[$a$.,,],[$b$.,,],[$c$.,,],[$d$.,,],[$e$.,,]]$

Required $1$

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Journal entry worksheet

Hint

Print

erences

Record the fair value adjustment for the portfolio of available$-$for$-$sale debt securities$.$ Carperk had no available$-$for$-$sale debt securities prior to this year.

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$December $31,,,],[,,,],[,,,],[,,,],[,,,]]$