Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with this accounting problem Required information Problem 15-2A (Static) Recording, adjusting, and reporting available-for-sale debt securities LO P3 [The following information applies to

please help with this accounting problem
image text in transcribed
image text in transcribed
Required information Problem 15-2A (Static) Recording, adjusting, and reporting available-for-sale debt securities LO P3 [The following information applies to the questions displayed below.) 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 ze Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 sold all of the Johnson & Johnson bonds for $23,500. July 5 sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the Kodak bonds for $20,475. December 31 Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600. Problem 15-2A (Static) Part 2 2. Complete the following table that summarizes the (a) total cost (6) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.) 12/31/Year 1 12/31/Year 2 12/31/Year 3 Debt investments Long Torm AFS Securities (cost) Fair value adjustment AFS Long Torm AFS Securities (Fair value) S OS 0$ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Kin Lo, George Fisher

4th Edition

0135220491, 9780135220498

More Books

Students also viewed these Accounting questions