Required information

Problem 15-3A (Algo) Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3

Skip to question

[The following information applies to the questions displayed below.] Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following.

Available-for-Sale Securities	Cost	Fair Value
Company A bonds	$ 534,500	$ 491,000
Company B notes	159,060	155,000
Company C bonds	662,700	646,190

Stoll enters into the following transactions involving its available-for-sale debt securities this year.

January 29	Sold one-half of the Company B notes for $78,500.
July 6	Purchased Company X bonds for $120,400.
November 13	Purchased Company Z notes for $267,700.
December 9	Sold all of the Company A bonds for $524,600.

Fair values at December 31 are B, $84,300 C, $601,500 X, $112,000 and Z, $270,000.

Problem 15-3A (Algo) Part 1 and 2

Required: 1. 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. 2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.