Required information The following information applies to the questions displayed below.) Mead Inc 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 Jan. 20 Purchased Johnson & Johnson bonds for $20,5ee. Feb. 9 Purchased notes of Sony for $55,440. June 12 Purchased bonds of Mattel for $48,5ee. Dec. 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,5ee; Sony, $52,508; and Mattel, $46,35e. Year 2 Apr. 15 Sold all of the bonds of Johnson & Johnson for $23,5ee. July 5 Sold all of the bonds of Mattel for $35,85e. July 22 Purchased notes of Sara Lee for $13,5ee. Aug. 19 Purchased bonds of Kodak for $15,300. Dec. 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 Feb. 27 Purchased bonds of Microsoft for $160,8ee. June 21 Sold all of the notes of Sony for $57,6ee. June 30 Purchased bonds of Black & Decker for $50,400 Aug. 3 Sold all of the notes of Sara Lee for $9,75e. Nov. 1 Sold all of the bonds of Kodak for $20,475. Dec. 31 Fair values for debt in the portfolio are Black & Decker, $54,6ee, and Microsoft, $158,600. 2. Complete the following table that summarizes the (a) total cost. (b) total fair value adjustment, and (total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.) 12/31/Yr. 1 12/31/Yr. 2 12/31/Yr. 3 Debt Investments Long-Term AFS Securities (cost) Fair value adjustment-AFS Long-Term AFS Securities (Fair value) $ 0$ S Year 1 Jan. 20 Purchased Johnson & Johnson bonds for $20,500 Feb. 9 Purchased notes of Sony for $55,440. June 12 Purchased bonds of Mattel for $40,500. Dec. 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, 546,350. Year 2 Apr. 15 Sold all of the bonds of Johnson & Johnson for $23,580 July 5 Sold all of the bonds of Mattel for $35,85e. July 22 Purchased notes of Sara Lee for $13,500. Aug. 19 Purchased bonds of Kodak for $15,300. Dec. 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 Feb. 27 Purchased bonds of Microsoft for $160,800. June 21 Sold all of the notes of Sony for $57,600. June 30 Purchased bonds of Black & Decker for $58,400. Aug, 3 Sold all of the notes of Sara Lee for $9,750. Nov. 1 Sold all of the bonds of Kodak for $20,475. Dec. 31 Fair values for debt in the portfolio are Black & Decker $54,60, and Microsoft, $158,600. 3. Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the portfolio of long-term available-for-sale debt securities at each year-end. (Losses should be indicated by a minus sign.) Year 1 Year 2 Year 3 Realized gains (losses) Sale of Johnson & Johnson Sale of Mattel Sale of Sony Sale of Sara Lee Sale of Kodak Total realized gains (losses) Unrealized gains (losses) at year-end $ 0 $ 0
