Question
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 $36,000. |
Sept. |
| 7 |
| Purchased Apple bonds for $61,000. |
|
| 12 |
| Purchased Mastercard bonds for $46,000. |
Oct. |
| 21 |
| Sold some of its Verizon bonds that had cost $3,300 for $3,400 cash. |
|
| 23 |
| Sold some of its Apple bonds that had cost $41,000 for $41,400 cash. |
Nov. |
| 1 |
| Purchased Walmart bonds for $66,000. |
Dec. |
| 10 |
| Sold all of its Mastercard bonds for $44,000 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, $34,500; Apple, $35,000; and Walmart, $52,000. 3. Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.
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