Question
Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3 Sorry if the format is off. I had to copy and paste the
Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3
Sorry if the format is off. I had to copy and paste the question because it will not let me upload a picture bc the file is too big. Format your answer however you wish and I will change it as necessary if I have to. Thanks.
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 20Purchased Johnson & Johnson bonds for $26,500.February 9Purchased Sony notes for $60,840.June 12Purchased Mattel bonds for $46,500.December 31Fair values for debt in the portfolio are Johnson & Johnson, $30,700; Sony, $49,950 and Mattel, $55,250.Year 2
April 15Sold all of the Johnson & Johnson bonds for $29,500.July 5Sold all of the Mattel bonds for $40,050.July 22Purchased Sara Lee notes for $16,300.August 19Purchased Kodak bonds for $19,500.December 31Fair values for debt in the portfolio are Kodak, $19,425 Sara Lee, $18,000 and Sony, $63,000.Year 3
February 27Purchased Microsoft bonds for $159,400.June 21Sold all of the Sony notes for $62,400.June 30Purchased Black & Decker bonds for $56,400.August 3Sold all of the Sara Lee notes for $15,150.November 1Sold all of the Kodak bonds for $24,375.December 31Fair values for debt in the portfolio are Black & Decker, $58,200 and Microsoft, $159,800.Problem 15-2A (Algo) Part 1
Required:
1. Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available-for-sale debt securities.
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