Question
[The following information applies to the questions displayed below.] Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale
[The following information applies to the questions displayed below.] Stoll Co.'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 | $ | 533,600 | $ | 490,000 | ||
Company B notes | 159,230 | 152,000 | ||||
Company C bonds | 662,000 | 640,190 | ||||
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
Jan. | 29 | Sold one-half of the Company B notes for $78,640. | ||
July | 6 | Purchased bonds of Company X for $126,900. | ||
Nov. | 13 | Purchased notes of Company Z for $267,900. | ||
Dec. | 9 | Sold all of the bonds of Company A for $521,600. |
The fair values at December 31 are B, $83,900 C, $605,200 X, $107,000 and Z, $275,000.
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started