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: $$408,300$ cost; $$443,822$ fair value. Carperk intends to hold these bonds until they mature in $5$ years.

b$.$ Investment in Baybridge common stock: $29,500$ shares; $$324,599$ cost; $$352,839$ fair value. Carperk owns $32\%$ of Baybridge's voting stock and has a significant influence over Baybridge.

c$.$ Investment in Duffa bonds: $$167,403$ cost; $$180,460$ fair value. This investment is not readily marketable and is not classified as held$-$to$-$maturity or trading.

d$.$ Investment in Newton notes: $$93,092$ cost; $$91,509$ 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; $$102,075$ cost; $$108,404$ 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.

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

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.

Type of Investment

Classification of Long$-$term Investment