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Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. Aug. 2 Purchased
Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities.
Aug. | 2 | Purchased Verizon bonds for $18,000. | ||
Sept. | 7 | Purchased Apple bonds for $43,000. | ||
12 | Purchased Mastercard bonds for $28,000. | |||
Oct. | 21 | Sold some of its Verizon bonds that had cost $2,400 for $2,500 cash. | ||
23 | Sold some of its Apple bonds that had cost $23,000 for $23,400 cash. | |||
Nov. | 1 | Purchased Walmart bonds for $48,000. | ||
Dec. | 10 | Sold all of its Mastercard bonds for $26,000 cash. |
Required 1. Prepare journal entries to record these transactions. 2. Prepare a table to compare the year-end cost and fair values of its trading debt securities. Year-end fair values: Verizon, $16,500; Apple, $26,000; and Walmart, $43,000. 3. Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.
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