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. Year 1 January 20 Purchased Johnson & Johnson bonds for $21,000. February 9 Purchased Sony notes for $55,890. June 12 Purchased Mattel bonds for $41,000. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,100; Sony, $46,650; and Mattel, $52,950. Year 2 April 15 sold all of the Johnson & Johnson bonds for $24,000. July 5 Sold all of the Mattel bonds for $36,200. July 22 Purchased Sara Lee notes for $13,900. August 19 Purchased Kodak bonds for $15,650. December 31 Fair values for debt in the portfolio are Kodak, $17,500; Sara Lee, $12,500; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $159,600. June 21 Sold all of the Sony notes for $58,000. June 30 Purchased Black & Decker bonds for $50,900. August 3 Sold all of the Sara Lee notes for $10,200. November 1 Sold all of the Kodak bonds for $20,800. December 31 Fair values for debt in the portfolio are Black & Decker, $54,900; and Microsoft, $158,700. Problem 15-2A (Algo) Part 3 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.) Year 1 Year 2 Year 3 Realized gains (losses) Problem 15-3A (Algo) Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3 (The following information applies to the questions displayed below.) Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Company B notes Company C bonds Cost $ 534,800 159,450 662,300 Fair Value $ 490,000 154,000 645,620 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,930. July 6 Purchased Company x bonds for $120,400. November 13 Purchased Company Z notes for $267,300. December 9 Sold all of the Company A bonds for $517,700. Fair values at December 31 are B, $84,800; C, $604,800; X, $112,000; and Z. $270,000. Problem 15-3A (Algo) Part 1 and 2 Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities. Complete this question by entering your answers in the tabs below. (The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Company A bonds Company B notes Company C bonds Cost $ 534,800 159,450 662,300 Fair Value $ 490,000 154,000 645,620 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,930. July 6 Purchased Company X bonds for $120,400. November 13 Purchased Company Z notes for $267,300. December 9 Sold all of the Company A bonds for $517,700. Fair values at December 31 are B, $84,800; C, $604,800; X, $112,000; and Z, $270,000. Problem 15-3A (Algo) Part 3 3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stoll report on its income statement for this year
