Mead Incorporated began operations in Year $1.$ Following is a series of transactions and events involving its long$-$term debt investments in available$-$for$-$sale securities$.6$

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Part $1$ of $3$

Required information

Year $1$

Year $2$

Year $3$

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$.$

$7$

points

$\backslash$table$[[$No$,$Date,General Journ:,,Debit,Credit$],[1,$February $27,$Debt investments $-$ Available$-$for$-$sale,V$,159,400,],[,$Cash,V$,,159,400],[2,$June $21,$Cash,V$,60,400,],[,$Gain on sale of debt investments,V$,,1,810],[,$Debt investments $-$ Available$-$for$-$sale,V$,,58,590],[3,$June $30,$Debt investments $-$ Available$-$for$-$sale,V$,53,900,],[,$Cash,V$,,53,900],[4,$August $03,$Cash,V$,12,900,],[,$Loss on sale of debt investments,V$,3,400,],[,$Debt investments $-$ Available$-$for$-$sale,V$,,16,300],[5,$November $01,$Cash,V$,22,750,],[,$Gain on sale of debt investments,Q$,,5,000],[,$Debt investments $-$ Available$-$for$-$sale,Q$,,17,750],[6,$December $31,$Unrealized gain $-$ Equity,V$,2,700\backslash$times $,],[,$Fair value adjustment $-$ Available$-$for$-$sale,$($V$),,2,700\backslash$times $]]$

Year $1$

January $20$ Purchased Johnson & Johnson bonds for $$24,000.$

February $9$ Purchased Sony notes for $$58,590.$

June $12$ Purchased Mattel bonds for $$44,000.$

December $31$ Fair values for debt in the portfolio are Johnson & Johnson, $$25,700$; Sony, $$48,450$ and Mattel, $$56,050.$

Year $2$

April $15$ Sold all of the Johnson & Johnson bonds for $$27,000.$

July $5$ Sold all of the Mattel bonds for $$38,300.$

July $22$ Purchased Sara Lee notes for $$16,300.$

August $19$ Purchased Kodak bonds for $$17,750.$

December $31$ Fair values for debt in the portfolio are Kodak, $$18,550$ Sara Lee, $$15,500$ and Sony, $$63,000.$

Year $3$

February $27$ Purchased Microsoft bonds for $$159,400.$

June $21$ Sold all of the Sony notes for $$60,400.$

June $30$ Purchased Black & Decker bonds for $$53,900.$

August $3$ Sold all of the Sara Lee notes for $$12,900.$

November $1$ Sold all of the Kodak bonds for $$22,750.$

December $31$ Fair values for debt in the portfolio are Black & Decker, $$56,700$ and Microsoft, $$159,300.$

Problem $15-2$A $($Algo$)$ Part $1$

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