Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.

Year 1

Jan.		20		Purchased Johnson & Johnson bonds for $20,500.
Feb.		9		Purchased notes of Sony for $55,440.
June		12		Purchased bonds of Mattel for $40,500.
Dec.		31		Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350.

Year 2

Apr.		15		Sold all of the bonds of Johnson & Johnson for $23,500.
July		5		Sold all of the bonds of Mattel for $35,850.
July		22		Purchased notes of Sara Lee for $13,500.
Aug.		19		Purchased bonds of Kodak for $15,300.
Dec.		31		Fair values for debt in the portfolio are Kodak, $17,325 Sara Lee, $12,000 and Sony, $60,000.

Year 3

Feb.		27		Purchased bonds of Microsoft for $160,800.
June		21		Sold all of the notes of Sony for $57,600.
June		30		Purchased bonds of Black & Decker for $50,400.
Aug.		3		Sold all of the notes of Sara Lee for $9,750.
Nov.		1		Sold all of the bonds of Kodak for $20,475.
Dec.		31		Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600.

2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.)

Mead Inc. began operations in Year 1, following is a series of transactions and events involving its long-term debt investments in available-for-sale securities.

Year 1

Jan.		20		Purchased Johnson & Johnson bonds for $20,500.
Feb.		9		Purchased notes of Sony for $55,440.
June		12		Purchased bonds of Mattel for $40,500.
Dec.		31		Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350.

Year 2

Apr.		15		Sold all of the bonds of Johnson & Johnson for $23,500.
July		5		Sold all of the bonds of Mattel for $35,850.
July		22		Purchased notes of Sara Lee for $13,500.
Aug.		19		Purchased bonds of Kodak for $15,300.
Dec.		31		Fair values for debt in the portfolio are Kodak, $17,325 Sara Lee, $12,000 and Sony, $60,000.

Year 3

Feb.		27		Purchased bonds of Microsoft for $160,800.
June		21		Sold all of the notes of Sony for $57,600.
June		30		Purchased bonds of Black & Decker for $50,400.
Aug.		3		Sold all of the notes of Sara Lee for $9,750.
Nov.		1		Sold all of the bonds of Kodak for $20,475.
Dec.		31		Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600.

2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.)

Long term afs securities YR 1/ YR 2/ YR 3

fair value adjustment- afs

long term afs securities