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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.

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.

FINANCIAL ACCOUNTING
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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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 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. April 15 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. Sold all of the Sara Lee notes for $18,750. Sold all of the Kodak bonds for $26,975. Fair values for debt in the portfolio are Black & Decker, $60,600; and Microsoft, $160,600. August 3 November 1 December 31 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 Prepare journal entries to record these transaction adjustments to the portfolio of long-term available View transaction list < Year 3 Journal entry worksheet 5 6 Fair values for debt in the portfolio are: Black & Decker, $60,600; and
Transcribed Image Text: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 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. April 15 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. Sold all of the Sara Lee notes for $18,750. Sold all of the Kodak bonds for $26,975. Fair values for debt in the portfolio are Black & Decker, $60,600; and Microsoft, $160,600. August 3 November 1 December 31 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 Prepare journal entries to record these transaction adjustments to the portfolio of long-term available View transaction list < Year 3 Journal entry worksheet 5 6 Fair values for debt in the portfolio are: Black & Decker, $60,600; and
Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 July 22 Sold all of the Mattel bonds for $42,850. 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. equired: Prepare journal entries to record these transactions and ne 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 Prepare journal entries to record these transactions adjustments to the portfolio of long-term available-f View transaction list Year 3 Journal entry worksheet Note: Enter debits before credits. Date December 31 4 Fair values for debt in the portfolio are: Black & Decker, $60,600; and Microsoft, $160,600. General Journal 6 Fair value adjustment - Stock Unrealized gain - Equity Debit 2,135 Credit 2,135
Transcribed Image Text:Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 July 22 Sold all of the Mattel bonds for $42,850. 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. equired: Prepare journal entries to record these transactions and ne 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 Prepare journal entries to record these transactions adjustments to the portfolio of long-term available-f View transaction list Year 3 Journal entry worksheet Note: Enter debits before credits. Date December 31 4 Fair values for debt in the portfolio are: Black & Decker, $60,600; and Microsoft, $160,600. General Journal 6 Fair value adjustment - Stock Unrealized gain - Equity Debit 2,135 Credit 2,135
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