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 $24,000.
Feb.		9		Purchased notes of Sony for $58,590.
June		12		Purchased bonds of Mattel for $44,000.
Dec.		31		Fair values for debt in the portfolio are Johnson & Johnson, $25,700; Sony, $48,450 and Mattel, $56,050.

Year 2

Apr.		15		Sold all of the bonds of Johnson & Johnson for $27,000.
July		5		Sold all of the bonds of Mattel for $38,300.
July		22		Purchased notes of Sara Lee for $16,300.
Aug.		19		Purchased bonds of Kodak for $17,750.
Dec.		31		Fair values for debt in the portfolio are Kodak, $18,550 Sara Lee, $15,500 and Sony, $63,000.

Year 3

Feb.		27		Purchased bonds of Microsoft for $159,400.
June		21		Sold all of the notes of Sony for $60,400.
June		30		Purchased bonds of Black & Decker for $53,900.
Aug.		3		Sold all of the notes of Sara Lee for $12,900.
Nov.		1		Sold all of the bonds of Kodak for $22,750.
Dec.		31		Fair values for debt in the portfolio are Black & Decker, $56,700 and Microsoft, $159,300.

Required: 1. Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available-for-sale debt securities.

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.)

3. Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale debt securities at each year-end.