Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3

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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 $22,000.
February 9	Purchased Sony notes for $56,790.
June 12	Purchased Mattel bonds for $42,000.
December 31	Fair values for debt in the portfolio are Johnson & Johnson, $23,300; Sony, $47,250 and Mattel, $53,650.

Year 2

April 15	Sold all of the Johnson & Johnson bonds for $25,000.
July 5	Sold all of the Mattel bonds for $36,900.
July 22	Purchased Sara Lee notes for $14,700.
August 19	Purchased Kodak bonds for $16,350.
December 31	Fair values for debt in the portfolio are Kodak, $17,850 Sara Lee, $13,500 and Sony, $61,000.

Year 3

February 27	Purchased Microsoft bonds for $159,200.
June 21	Sold all of the Sony notes for $58,800.
June 30	Purchased Black & Decker bonds for $51,900.
August 3	Sold all of the Sara Lee notes for $11,100.
November 1	Sold all of the Kodak bonds for $21,450.
December 31	Fair values for debt in the portfolio are Black & Decker, $55,500 and Microsoft, $158,900.

Problem 15-2A (Algo) Part 2

2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end.

Note: Loss amounts should be indicated with a minus sign.