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 $28,200. February 9 Purchased Sony notes for $64,890. June 12 Purchased Mattel bonds for $50,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42.850.
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 $28,200. February 9 Purchased Sony notes for $64,890. June 12 Purchased Mattel bonds for $50,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42.850.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1PB: Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1....
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Question
![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
$28,200.
February 9 Purchased Sony notes for $64,890.
June 12 Purchased Mattel bonds for $50,500.
December 31 Fair values for debt in the portfolio are
Johnson & Johnson, $33,500; Sony, $53,350;
and Mattel, $58,750.
Year 2
April 15
Sold all of the Johnson & Johnson bonds for
$33,500.
July 5
Sold all of the Mattel bonds for $42,850.
July 22 Purchased Sara Lee notes for $20,500.
August 19 Purchased Kodak bonds for $22,300.
December 31 Fair values for debt in the portfolio are
Kodak, $22,825; Sara Lee, $22,000; and Sony,
$66,000.
Year 3
February 27 Purchased Microsoft bonds for $159,800.
June 21 Sold all of the Sony notes for $65,600.
June 30 Purchased Black & Decker bonds for $60,400.
August 3 Sold all of the Sara Lee notes for $18,750.
November 1 Sold all of the Kodak bonds for $26,975.
December 31 Fair values for debt in the portfolio are
Black & Decker, $60,600; and Microsoft,
$160,600.
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.
Complete this question by entering your ans
Year 1
Year 2
Year 3
Prepare journal entries to record these transaction
adjustments to the portfolio of long-term available
View transaction list
Journal entry workshoot](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F623a8a2c-5054-47a2-aa7c-ee184bb3ab2f%2F45a3842a-b105-4a60-a888-1af851d0ced5%2Fvshogwv_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
$28,200.
February 9 Purchased Sony notes for $64,890.
June 12 Purchased Mattel bonds for $50,500.
December 31 Fair values for debt in the portfolio are
Johnson & Johnson, $33,500; Sony, $53,350;
and Mattel, $58,750.
Year 2
April 15
Sold all of the Johnson & Johnson bonds for
$33,500.
July 5
Sold all of the Mattel bonds for $42,850.
July 22 Purchased Sara Lee notes for $20,500.
August 19 Purchased Kodak bonds for $22,300.
December 31 Fair values for debt in the portfolio are
Kodak, $22,825; Sara Lee, $22,000; and Sony,
$66,000.
Year 3
February 27 Purchased Microsoft bonds for $159,800.
June 21 Sold all of the Sony notes for $65,600.
June 30 Purchased Black & Decker bonds for $60,400.
August 3 Sold all of the Sara Lee notes for $18,750.
November 1 Sold all of the Kodak bonds for $26,975.
December 31 Fair values for debt in the portfolio are
Black & Decker, $60,600; and Microsoft,
$160,600.
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.
Complete this question by entering your ans
Year 1
Year 2
Year 3
Prepare journal entries to record these transaction
adjustments to the portfolio of long-term available
View transaction list
Journal entry workshoot
![Check my work
August 19 Purchased Kodak bonds for $22,300.
December 31 Fair values for debt in the portfolio are
Kodak, $22,825; Sara Lee, $22,000; and Sony,
$66,000.
Year 3
February 27 Purchased Microsoft bonds for $159,800.
June 21 Sold all of the Sony notes for $65,600.
June 30 Purchased Black & Decker bonds for $60,400.
August 3 Sold all of the Sara Lee notes for $18,750.
November 1 Sold all of the Kodak bonds for $26,975.
December 31
Fair values for debt in the portfolio are
Black & Decker, $60,600; and Microsoft,
$160,600.
equired:
Prepare journal entries to record these transactions and
le year-end fair value adjustments to the portfolio of long-
erm available-for-sale debt securities.
Complete this question by entering your answ
Year 1
Year 2
Year 3
Prepare journal entries to record these transactions
adjustments to the portfolio of long-term available-f
View transaction list
Journal entry worksheet
1
2 3 4
Purchased bonds of Johnson & Johnson for $28,200.
Note: Enter debits before credits.
Date
General Journal
Credit
January 20 Bonds payable
Record entry
View general jo
Clear entry
Debit
28,200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F623a8a2c-5054-47a2-aa7c-ee184bb3ab2f%2F45a3842a-b105-4a60-a888-1af851d0ced5%2Fftsggfh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Check my work
August 19 Purchased Kodak bonds for $22,300.
December 31 Fair values for debt in the portfolio are
Kodak, $22,825; Sara Lee, $22,000; and Sony,
$66,000.
Year 3
February 27 Purchased Microsoft bonds for $159,800.
June 21 Sold all of the Sony notes for $65,600.
June 30 Purchased Black & Decker bonds for $60,400.
August 3 Sold all of the Sara Lee notes for $18,750.
November 1 Sold all of the Kodak bonds for $26,975.
December 31
Fair values for debt in the portfolio are
Black & Decker, $60,600; and Microsoft,
$160,600.
equired:
Prepare journal entries to record these transactions and
le year-end fair value adjustments to the portfolio of long-
erm available-for-sale debt securities.
Complete this question by entering your answ
Year 1
Year 2
Year 3
Prepare journal entries to record these transactions
adjustments to the portfolio of long-term available-f
View transaction list
Journal entry worksheet
1
2 3 4
Purchased bonds of Johnson & Johnson for $28,200.
Note: Enter debits before credits.
Date
General Journal
Credit
January 20 Bonds payable
Record entry
View general jo
Clear entry
Debit
28,200
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