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M. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations: Issuing Company Cost Arden Enterprises Inc. $150,000 French Broad Industries
M. Jones Inc. purchased the following available-for-sale securities during 20Y5, its first year of operations:
Issuing Company | Cost |
Arden Enterprises Inc. | $150,000 |
French Broad Industries Inc. | 66,000 |
Pisgah Construction Inc. | 104,000 |
$320,000 |
The fair value of the various available-for-sale securities on December 31, 20Y5, was as follows:
Issuing Company | Fair Value, Dec. 31, 20Y5 |
Arden Enterprises Inc. | $170,000 |
French Broad Industries Inc. | 71,500 |
Pisgah Construction Inc. | 96,000 |
$337,500 |
Required:
a. | Journalize the adjusting entry for the fair value of the portfolio of securities on December 31, 20Y5.* |
b. | If the fair value of the portfolio of securities were the same on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
c. | If the fair value of the portfolio of securities was $340,000 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
d. | If the fair value of the portfolio of securities was $330,000 on December 31, 20Y6, what would be the journal entry to adjust the portfolio to fair value?* |
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. If no entry is required, simply skip to the next transaction. |
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