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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 $38,000. | ||
Sept. | 7 | Purchased Apple bonds for $63,000. | ||
12 | Purchased Mastercard bonds for $48,000. | |||
Oct. | 21 | Sold some of its Verizon bonds that had cost $3,400 for $3,500 cash. | ||
23 | Sold some of its Apple bonds that had cost $43,000 for $43,400 cash. | |||
Nov. | 1 | Purchased Walmart bonds for $68,000. | ||
Dec. | 10 | Sold all of its Mastercard bonds for $46,000 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, $36,500; Apple, $36,000; and Walmart, $53,000. 3. Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.
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