Recording Entries for Equity Investment FV NI Adjust FVA at Year End 5M Corporation completed the following transactions, in the order given, relative to the portfolio of stocks held as equity investments measured at FV NI Year 2020 1 Purchased 390 shares of Starbux Corporation common stock (par value $1) at $50 per share plus a brokerage commission of 4 and transfer costs of $130 on August 1, 2020 2 Purchased 780 shares of Kolgate Corporation Class A common stock (par value $0 50) at $35 per share plus transfer costs of $195 on September 15, 2020 Year 2021 1 Purchased 715 shares of Starbux Corporation common stock at $55 per share plus a brokerage commission of 4 and transfer costs of $156 on February 1, 2021 2 Received declared cash dividends of $2 00 per share on the Kolgate Corporation Class A common stock on June 30, 2021 3 Sold 195 shares of Starbux Corporation common stock at $58 per share on August 15, 2021 Year End Stock Prices 2020 2021 Starbux, common stock $48 $60 Kolgate, Class A common stock 38 50 Journal Entries for 2020 Journal Entries for 2021 c Record the purchase of Starbux Corporation common stock in 2021 d Record the receipt of declared dividends on the Kolgate common stock in 2021 e Record the sale of Starbux common stock in 2021 Assume FIFO (first in, first out) order when shares are sold f Provide the entry for 5M Corporation on December 31, 2021, to adjust the Fair Value Adjustment account Note List multiple debits or credits (when applicable) in alphabetical order Date Account Name Dr Cr c Feb 1, 2021 AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer d June 30, 2021 AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer e Aug 15, 2021 AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer f Dec 31, 2021 AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment TSInvestment in AFS SecuritiesFair Value Adjustment AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment Equity SecuritiesFair Value Adjustment Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss OCIUnrealized Gain or Loss IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN A Answer Answer Feedback You have correctly selected 32

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Recording Entries for Equity Investment: FV-NI Adjust FVA at Year-End 5M Corporation completed the following transactions, in the order given, relative to the portfolio of

Recording Entries for Equity Investment: FV-NI

Adjust FVA at Year-End

5M Corporation completed the following transactions, in the order given, relative to the portfolio of stocks held as equity investments measured at FV-NI.

Year 2020

1. Purchased 390 shares of Starbux Corporation common stock (par value $1) at $50 per share plus a brokerage commission of 4% and transfer costs of $130 on August 1, 2020.

2. Purchased 780 shares of Kolgate Corporation Class A common stock (par value $0.50) at $35 per share plus transfer costs of $195 on September 15, 2020.

Year 2021

1. Purchased 715 shares of Starbux Corporation common stock at $55 per share plus a brokerage commission of 4% and transfer costs of $156 on February 1, 2021.

2. Received declared cash dividends of $2.00 per share on the Kolgate Corporation Class A common stock on June 30, 2021.

3. Sold 195 shares of Starbux Corporation common stock at $58 per share on August 15, 2021.

Year-End Stock Prices	2020	2021
Starbux, common stock	$48	$60
Kolgate, Class A common stock	38	50

Journal Entries for 2020
Journal Entries for 2021

c. Record the purchase of Starbux Corporation common stock in 2021.

d. Record the receipt of declared dividends on the Kolgate common stock in 2021.

e. Record the sale of Starbux common stock in 2021. Assume FIFO (first-in, first-out) order when shares are sold.

f. Provide the entry for 5M Corporation on December 31, 2021, to adjust the Fair Value Adjustment account.

Note: List multiple debits or credits (when applicable) in alphabetical order.

	Date	Account Name	Dr.	Cr.
c.	Feb. 1, 2021	AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
		AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
d.	June 30, 2021	AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
		AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
e.	Aug. 15, 2021	AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
		AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
		AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
f.	Dec. 31, 2021	AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer
		AnswerCashInterest ReceivableInvestment in TSFair Value Adjustment--TSInvestment in AFS SecuritiesFair Value Adjustment--AFSInvestment in HTM SecuritiesInvestment in StockFair Value Adjustment--Equity SecuritiesFair Value Adjustment--Fair Value OptionAllowance for Credit LossesAccumulated Other Comprehensive IncomeUnrealized Gain or Loss--OCIUnrealized Gain or Loss--IncomeDividend RevenueInterest RevenueInvestment IncomeLoss on ImpairmentRecovery of Loss on ImpairmentLoss on Sale of InvestmentGain on Sale of InvestmentN/A	Answer	Answer