Required information [The following information applies to the questions displayed below.] 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 20 Purchased Johnson & Johnson bonds for $25,500. February 9 Purchased Sony notes for $59,940. June 12 Purchased Mattel bonds for $45,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $29,500; Sony, $49,350; and Mattel, $54,750. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $28,500. July 5 Sold all of the Mattel bonds for $39,350. July 22 Purchased Sara Lee notes for $15,500. August 19 Purchased Kodak bonds for $18,800. December 31 Fair values for debt in the portfolio are Kodak, $19,075; Sara Lee, $17,000; and Sony, $62,000. Year 3 February 27 Purchased Microsoft bonds for $159,800. June 21 Sold all of the Sony notes for $61,600. June 30 Purchased Black & Decker bonds for $55,400. August 3 Sold all of the Sara Lee notes for $14,250. November 1 Sold all of the Kodak bonds for $23,725. December 31 Fair values for debt in the portfolio are Black & Decker, $57,600; and Microsoft, $159,600. 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.