MS buys and sells securities expecting to earn profits on short-term differences in price. The following selected transactions relate to MS's investments in trading securities during 2021. The company's fiscal year ends on December 31. No trading securities were held by MS on Jan 1, 2021.

2021

Jan 1) Purchased as $200,000 of 8% BA (Boeing) bonds, dated January 1, 2021, to hold as trading securities. The market rate was 7%. The bonds mature in 3 years. Interest is received semi-annually on June 30 and December 31.

Jul 1) Purchased as $120,000 of 10% XOM (Exxon) bonds, dated July 1, 2021, to hold as trading securities. The market rate was 12%. The bonds mature in 5 years. Interest is received semi-annually on June 30 and December 31.

Aug 3) Purchased 10,000 shares of MSFT (Microsoft) stocks for $250 per share

12) Purchased 10,000 shares of MSFT stocks for $280 per share

13) Received cash dividend $2,000 from MSFT.

Sep 1) Purchased 10,000 shares of MSFT stocks for $300 per share

15) Sold 15,000 shares of MSFT stocks for $315 per share.

Oct 1) Purchased 1,000 shares of TSLA (Tesla) stocks for $800 per share

2) Purchased 5,000 shares of TSLA stocks for $780 per share

Nov 1) Sold 2,300 shares of TSLA stocks for $900 per share

Dec 31) Market prices for trading securities are as follows:

MSFT: $320 per share, TSLA: $980 per share, BA bonds: $210,000, XOM bonds: $110,000

Assume stocks are sold First-in, first-out.

2022

May 1) Sold 3,000 shares of TSLA stocks for $1,000 per share

July 1) Sold BA bonds at $220,000

Aug 1) Sold 7,000 MSFT stocks for $350 per share

Sep 1) Purchased 10,000 MSFT stocks for $320 per share

Nov 1) Purchased 10,000 TSLA stocks for $1,100 per share

Dec 31) Market prices for trading securities are as follows:

MSFT: $375 per share, TSLA: $1,040 per share, XOM bonds: $127,000,

Assume stocks are sold First-in, first-out (FIFO).

(Answer in $dollars. Ignore tax implications.)

1. Set up amortization tables for the bonds.
2. Fill in the following tables for each security (answer in $dollars).

BA	Amortized Cost	Fair Value	FVA, desired Balance	Change to be made to FVA
12/31/2021
7/1/2022
XOM	Amortized Cost	Fair Value	FVA, desired Balance	Change to be made to FVA
12/31/2021
12/31/2022
MSFT	COST	Fair Value	FVA, desired Balance	Change to be made to FVA
12/31/2021
12/31/2022
TSLA	COST	Fair Value	FVA, desired Balance	Change to be made to FVA
12/31/2021
12/31/2022

3. Prepare journal entries for 2021-2022.

4. Re-make the above tables with the cost-basis assumption that stocks are sold Last-in, First-out (LIFO).