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Hurricane Inc. purchased a portfolio of available-for-sale securities in Year 1, its first year of operations. The cost and fair value of this portfolio on
Hurricane Inc. purchased a portfolio of available-for-sale securities in Year 1, its first year of operations. The cost and fair value of this portfolio on December 31, Year 1, was as follows:
Name | Number of shares | Total Cost | Total Fair Value |
Tornado Inc. | 1,450 | $19,430 | $21,570 |
Tsunami Corp. | 850 | 27,880 | 30,390 |
Typhoon Corp | 300 | 9,300 | 8,840 |
Total | $56,610 | $60,800 |
On June 12, Year 2, Hurricane purchased 600 shares of Rogue Wave Inc. at $31 per share plus a $80 brokerage commission.
a. Provide the journal entries to record the following:
1.The adjustment of the available-for-sale security portfolio to fair value on December 31, Year 1.
2. The June 12, Year 2, purchase of Rogue Wave Inc. stock.
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