[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 $20,500.
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, $46,350.

Year 2

Apr.		15		Sold all of the bonds of Johnson & Johnson for $23,500.
July		5		Sold all of the bonds of Mattel for $35,850.
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 $50,400.
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, $54,600, and Microsoft, $158,600.

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.

• 1

  Purchased Johnson & Johnson bonds for $20,500.

• 2

  Purchased notes of Sony for $55,440.

• 3

  Purchased bonds of Mattel for $40,500.

• 4

  Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500 and Mattel, $46,350.

• 1

  Sold all of the bonds of Johnson & Johnson for $23,500.

• 2

  Sold all of the bonds of Mattel for $35,850.

• 3

  Purchased notes of Sara Lee for $13,500.

• 4

  Purchased bonds of Kodak for $15,300.

• 5

  Fair values for debt in the portfolio are Kodak, $17,325 Sara Lee, $12,000 and Sony, $60,000.

• Purchased bonds of Microsoft for $160,800.

• 2

  Sold all of the notes of Sony for $57,600.

• 3

  Purchased bonds of Black & Decker for $50,400.

• 4

  Sold all of the notes of Sara Lee for $9,750.

• 5

  Sold all of the bonds of Kodak for $20,475.

• 6

  Fair values for debt in the portfolio are Black & Decker, $54,600 and Microsoft, $158,600.