Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 $25,500. | ||
Feb. | 9 | Purchased notes of Sony for $59,940. | ||
June | 12 | Purchased bonds of Mattel for $45,500. | ||
Dec. | 31 | Fair values for debt in the portfolio are Johnson & Johnson, $29,500; Sony, $49,350 and Mattel, $54,750. |
Year 2
Apr. | 15 | Sold all of the bonds of Johnson & Johnson for $28,500. | ||
July | 5 | Sold all of the bonds of Mattel for $39,350. | ||
July | 22 | Purchased notes of Sara Lee for $15,500. | ||
Aug. | 19 | Purchased bonds of Kodak for $18,800. | ||
Dec. | 31 | Fair values for debt in the portfolio are Kodak, $19,075 Sara Lee, $17,000 and Sony, $62,000. |
Year 3
Feb. | 27 | Purchased bonds of Microsoft for $159,800. | ||
June | 21 | Sold all of the notes of Sony for $61,600. | ||
June | 30 | Purchased bonds of Black & Decker for $55,400. | ||
Aug. | 3 | Sold all of the notes of Sara Lee for $14,250. | ||
Nov. | 1 | Sold all of the bonds of Kodak for $23,725. | ||
Dec. | 31 | Fair values for debt in the portfolio are Black & Decker, $57,600 and Microsoft, $159,600. |
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. (Losses should be indicated by a minus sign.)
June 21 Sold all of the notes of Sony for $61,600. June 30 Purchased bonds of Black & Decker for $55,400. Aug. 3 Sold all of the notes of Sara Lee for $14,250. Nov. 1 Sold all of the bonds of Kodak for $23,725. Dec. 31 Fair values for debt in the portfolio are Black & Decker, $57,600; and Problem 15-2A Part 3 B. Complete the following table that summarizes (a) the realized gains and losses and (/ portfolio of long-term available-for-sale debt securities at each year-end. (Losses shouk Year 1 Year 2 Year 3 Realized gains (losses) Sale of Johnson & Johnson Sale of Mattel Sale of Sony Sale of Sara Lee Sale of Kodak Total realized gains (losses) Unrealized gains (losses) at year-end 0 $ 0 $ Prev 3 of 12Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started