On January 1, 20x1, JME invested in 5% bonds of Fishing, Inc. that were purchased at face. Interest is paid annually on December 31. Certain data for 20X1 and 20X2 are as follows

year	# bonds purchased	Cost per bond		Mkt price of bonds on 12/31
20X1	50	$1,000		97% of face value
20X2	n/a	n/a		95% of face value

1 - JME has no other investment securities (disregard Requirement #1 information)

2 - These are AVAILABLE-FOR-SALE SECURITIES (AFS) under ASC 220 i.e., securities bought and are available to sell if cash needs arise or the market conditions are favorable. AFS debt securities are not planned to be sold in the very near future like an actively managed trading security. Nor does JME plan to hold the debt security till it reaches maturity like a held to maturity investment.

3 - JME applies ASC 320 in both 20X1 and 20X2

4 - No investments were sold in 20X1

5 On 2/27/X2 JME sold all the Fishing bonds for cash at a price of $46,500.

6 Prior to recording the sale of any security, JME records an adjustment to the value of its whole portfolio of AFS

7 You may ignore taxes

1 - In the table shown on the next page, you are to record all journal entries, if required, on the dates indicated. Some of the account titles JME uses include Trading Securities, AFS Securities, Dividend Revenue/Income, Investment Inc. Unrealized Gain (Loss), Unrealized gain/loss on AFS-Other Comprehensive Income, Realized Gain (Loss) on Sale, Cash, Fair Value Adjustment, and Interest Income etc. Show computations where applicable.

1/1/X1
12/31/X1
12/31/X1
2/27/X2

2 - Following are amounts from the F/S of JME, Inc. BEFORE giving consideration to the AFS securities transactions

Item	20X1	20X2
Net Income	170,000	180,000
Cash flow from operating activities	250,000	260,000
Cash flow from investing activities	<97,000>	<69,000>
Cash flow from financing activities	80,000	75,000

You are to restate the above amounts AFTER consideration of the transactions

Item	20X1	20X2
Net Income
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities