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 $21,000. February 9 Purchased Sony notes for $55,890. June 12 Purchased Mattel bonds for $41,000. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,100; Sony, $46,650; and Mattel, $52,950. Year 2 April 15 July 5 July 22 August 19 December 31 Year 3 Sold all of the Johnson & Johnson bonds for $24,000. Sold all of the Mattel bonds for $36,200. Purchased Sara Lee notes for $13,900. Purchased Kodak bonds for $15,650. Fair values for debt in the portfolio are Kodak, $17,500; Sara Lee, $12,500; and Sony, $60,000. February 27 Purchased Microsoft bonds for $159,600. June 21 Sold all of the Sony notes for $58,000. June 30 Purchased Black & Decker bonds for $50,900. August 3 Sold all of the Sara Lee notes for $10,200. November 1 Sold all of the Kodak bonds for $20,800. December 31 Fair values for debt in the portfolio are Black & Decker, $54,900; and Microsoft, $158,700. Problem 15-2A (Algo) Part 1 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. Year 1 Year 2 Year 3
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 $21,000. February 9 Purchased Sony notes for $55,890. June 12 Purchased Mattel bonds for $41,000. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,100; Sony, $46,650; and Mattel, $52,950. Year 2 April 15 July 5 July 22 August 19 December 31 Year 3 Sold all of the Johnson & Johnson bonds for $24,000. Sold all of the Mattel bonds for $36,200. Purchased Sara Lee notes for $13,900. Purchased Kodak bonds for $15,650. Fair values for debt in the portfolio are Kodak, $17,500; Sara Lee, $12,500; and Sony, $60,000. February 27 Purchased Microsoft bonds for $159,600. June 21 Sold all of the Sony notes for $58,000. June 30 Purchased Black & Decker bonds for $50,900. August 3 Sold all of the Sara Lee notes for $10,200. November 1 Sold all of the Kodak bonds for $20,800. December 31 Fair values for debt in the portfolio are Black & Decker, $54,900; and Microsoft, $158,700. Problem 15-2A (Algo) Part 1 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. Year 1 Year 2 Year 3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3
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[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 $21,000.
February 9
Purchased Sony notes for $55,890.
June 12
Purchased Mattel bonds for $41,000.
December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,100; Sony, $46,650; and Mattel, $52,950.
Year 2
April 15
July 5
July 22
August 19
December 31
Year 3
February 27
Purchased Microsoft bonds for $159,600.
June 21
Sold all of the Sony notes for $58,000.
June 30
Purchased Black & Decker bonds for $50,900.
August 3
Sold all of the Sara Lee notes for $10,200.
November 1
Sold all of the Kodak bonds for $20,800.
December 31 Fair values for debt in the portfolio are Black & Decker, $54,900; and Microsoft, $158,700.
Sold all of the Johnson & Johnson bonds for $24,000.
Sold all of the Mattel bonds for $36,200.
Purchased Sara Lee notes for $13,900.
Purchased Kodak bonds for $15,650.
Fair values for debt in the portfolio are Kodak, $17,500; Sara Lee, $12,500; and Sony, $60,000.
Problem 15-2A (Algo) Part 1
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.
Year 1
Year 2
Year 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4be9481d-42db-49d0-9351-cb00829908ba%2Ff1c23ab8-a61d-4c5f-b3e4-d58aac05c325%2Fe86gc4d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3
Skip to question
[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 $21,000.
February 9
Purchased Sony notes for $55,890.
June 12
Purchased Mattel bonds for $41,000.
December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,100; Sony, $46,650; and Mattel, $52,950.
Year 2
April 15
July 5
July 22
August 19
December 31
Year 3
February 27
Purchased Microsoft bonds for $159,600.
June 21
Sold all of the Sony notes for $58,000.
June 30
Purchased Black & Decker bonds for $50,900.
August 3
Sold all of the Sara Lee notes for $10,200.
November 1
Sold all of the Kodak bonds for $20,800.
December 31 Fair values for debt in the portfolio are Black & Decker, $54,900; and Microsoft, $158,700.
Sold all of the Johnson & Johnson bonds for $24,000.
Sold all of the Mattel bonds for $36,200.
Purchased Sara Lee notes for $13,900.
Purchased Kodak bonds for $15,650.
Fair values for debt in the portfolio are Kodak, $17,500; Sara Lee, $12,500; and Sony, $60,000.
Problem 15-2A (Algo) Part 1
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.
Year 1
Year 2
Year 3
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