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 debtinvestments in available-for-sale securities.Year 1January 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 2April 15July 5 Sold all of the Mattel bonds for $39,350.Sold all of the Johnson & Johnson bonds for $28,500.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 3February 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, $159,600.2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolioof long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.)Debt Investments12/31/Year 112/31/Year 212/31/Year 3Long-Term AFS Securities (cost)$Fair value adjustment-AFSLong-Term AFS Securities (Fair value)$130,9402,660133,600 $00

Investment means an asset purchased in expectation of earning a return on such investment in future…

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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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