Question
Scroll down to complete all parts of this task. Record the journal entries to be made by Fox Inc. for the following marketable security transactions
Scroll down to complete all parts of this task.
Record the journal entries to be made by Fox Inc. for the following marketable security transactions based on the information in the exhibit. To prepare each required journal entry:
- Click on a cell in the Account Name column and select the appropriate account. An account may be used once or not at all for a journal entry.
- Enter the corresponding debit or credit amount in the associated column.
- All amounts will be automatically rounded to the nearest dollar.
- Not all rows in the table might be needed to complete each journal entry.
The following information pertains to Fox Inc.s portfolio of marketable securities for the year ended December 31, Year 1, and December 31, Year 2:
Cost | Fair Value at 12/31/ Year 1 | Year 2 Activity: Purchases | Year 2 Activity: Sales | Fair Value at 12/31/ Year 2 | |
Marketable Equity Securities | |||||
Smith Co. | $230,000 | $240,000 | $235,000 | ||
Jones Co. | $290,000 | $275,000 | $285,000 | ||
Williams Co. | $270,000 | $245,000 | $255,000 | N/A | |
Gores Co. | $250,000 | $235,000 | $265,000 | ||
Held-to-Maturity Debt Securities | |||||
Martin Co. | $1,400,000 | $1,250,000 |
Note 1: Fox Inc. uses U.S. GAAP. Note 2: Fox Inc. uses valuation accounts to record changes in the fair value of its marketable securities, and an allowance account for any applicable credit losses. Note 3: The Martin Co. security was purchased at par value. Note 4: The decline in the value of Martin Company security is the result of current expected credit losses, with the present value of future principal and interest payment collections equal to fair value at the end of Year 2.
Year 1 Journal Entries:
1. Mark-to-market journal entry for the Smith Co. security at 12/31/Year 1:
2. Mark-to-market journal entry for the Jones Co. security at 12/31/Year 1:
3. Mark-to-market journal entry for the Williams Co. security at 12/31/Year 1:
4. Mark-to-market journal entry for the Gores Co. security at 12/31/Year 1:
Year 2 Journal Entries:
5. Mark-to-market journal entry for the Smith Co. security at 12/31/Year 2:
6. Mark-to-market journal entry for the Jones Co. security at 12/31/Year 2:
7. Journal entry to record the sale of the Williams Co. security on 7/1/Year 2:
8. Mark-to-market journal entry for the Gores Co. security at 12/31/Year 2:
9. Journal entry to record purchase of the Martin Co. investment:
10. Journal entry to record the impairment of the Martin Co. investment:
ONLY USE THE FOLLOWING
Allowance for credit losses
Cash
Credit loss
Equity securities, Gores Co.
Equity securities, Jones Co.
Equity securities, Smith Co.
Equity securities, Williams Co
.Held-to-maturity debt securities, Martin Co.
Realized gain on equity securities
Realized loss on equity securities
Unrealized gain on equity securities
Unrealized loss on equity securities
Valuation account, Gores Co.
Valuation account, Jones Co.
Valuation account, Smith Co.
Valuation account, Williams Co.
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