Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 15-3A (Algo) Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3 Stoll Company's long-term available-for-sale portfolio at the start of
Problem 15-3A (Algo) Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3
Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following.
Available-for-Sale SecuritiesCostFair ValueCompany A bonds$ 533,600$ 490,000Company B notes159,230152,000Company C bonds662,000640,190Stoll enters into the following transactions involving its available-for-sale debt securities this year.
January 29Sold one-half of the Company B notes for $78,640.July 6Purchased Company X bonds for $126,900.November 13Purchased Company Z notes for $267,900.December 9Sold all of the Company A bonds for $521,600.Fair values at December 31 are B, $83,900 C, $605,200 X, $107,000 and Z, $275,000.
Problem 15-3A (Algo) Part 1 and 2
Required:
- Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.
- Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started