### Mead Incorporated: Long-Term Debt Investments**Introduction:**Mead Incorporated commenced operations in Year 1. Below is a record of its transactions and events related to long-term debt investments classified as 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 were: - Johnson & Johnson: $33,500 - Sony: $53,350 - 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 were: - Kodak: $22,825 - Sara Lee: $22,000 - 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 were: - Black & Decker: $60,600 - Microsoft: $160,600### **Year-End Portfolio Summary:**2. Complete the following table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. (Loss amounts should be indicated with a minus sign.)| Debt Investments | 12/31/Year 1 | 12/31/Year 2 | ### Educational Resource: Understanding Long-Term Available-for-Sale Securities#### Series of Transactions and Events for Long-Term Available-for-Sale Securities**Year 1:**- **January 20:** - **Transaction:** Purchased Johnson & Johnson bonds. - **Amount:** $28,200. - **February 9:** - **Transaction:** Purchased Sony notes. - **Amount:** $64,890. - **June 12:** - **Transaction:** Purchased Mattel bonds. - **Amount:** $50,500.- **December 31:** - **Fair Values for Debt in the Portfolio:** - Johnson & Johnson: $33,500. - Sony: $53,350. - Mattel: $58,750.**Year 2:**- **April 15:** - **Transaction:** Sold all of the Johnson & Johnson bonds. - **Amount:** $33,500.- **July 5:** - **Transaction:** Sold all of the Mattel bonds. - **Amount:** $42,850.- **July 22:** - **Transaction:** Purchased Sara Lee notes. - **Amount:** $20,500. - **August 19:** - **Transaction:** Purchased Kodak bonds. - **Amount:** $22,300.- **December 31:** - **Fair Values for Debt in the Portfolio:** - Kodak: $22,825. - Sara Lee: $22,000. - Sony: $66,000.**Year 3:**- **February 27:** - **Transaction:** Purchased Microsoft bonds. - **Amount:** $159,800.- **June 21:** - **Transaction:** Sold all of the Sony notes. - **Amount:** $65,600.- **June 30:** - **Transaction:** Purchased Black & Decker bonds. - **Amount:** $60,400.- **August 3:** - **Transaction:** Sold all of the Sara Lee notes. - **Amount:** $18,750.- **December 1:** - **Transaction:** Sold all of the Kodak bonds. - **Amount:** $26,975.- **December 31:** - **Fair Values for Debt in the Portfolio

Total cost refers to the compiled sum of expenses involved while producing a product.

Answered: orporated began operations in Year 1.…

orporated began operations in Year 1. Followi transactions and events involving its long-te stments in available-for-sale securities. 20 Purchased Johnson & Johnson bonds for $28,200.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Prepare Natura Company's journal entries to record the following transactions involving its short-term investments in held-to-maturity debt securities, all of which occurred during the current year. a. On June 15, paid $180,000 cash to purchase Remed's 90-day short-term debt securities ($180,000 principal), dated June 15, that pay 7% interest. b. On September 16, received a check from Remed in payment of the principal and 90 days' interest on the debt securities purchased in transaction a. Note: Use 360 days in a year. Do not round your intermediate calculations. View transaction list Journal entry worksheet < 1 2 On June 15, paid $180,000 cash to purchase Remed's 90-day short-term debt securities ($180,000 principal), dated June 15, that pay 7% interest. Note: Enter debits before credits. Transaction a. Record entry General Journal Clear entry Debit Credit View general journal
Bond (held-to-maturity) investments Journalize the entries to record the following selected held-to-maturity investment transactions for Beacon Trust: If an amount box does not require an entry, leave it blank. a. Purchased for cash $576,000 of Vasquez City 7% bonds at 100 plus accrued interest of $10,080. b. Received first semiannual interest payment. c. Sold $288,000 of the bonds at 99 plus accrued interest of $1,680. d. Received face value of remaining bonds at their maturity.
On May 1, 2021, Bramble Corp. purchased $1,580,000 of 12% bonds, interest payable on January 1 and July 1, for $1,406,500 plus accrued interest. The bonds mature on January 1, 2027. Amortization is recorded when interest is received by the straight-line method. (Assume bonds are available for sale.) (a) Prepare the journal entry for May 1, 2021.
1.Prepare Hertog Company’s journal entries to record the following transactions for the current year. May 7 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,830. June 6 Sells its entire investment in Kraft bonds for $11,330 cash
The Melon Company issues $519,000 of 8%, 10-year bonds at 103 on March 31, Year 1. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight- line method for amortization. Calculate the net balance that will be reported for the bonds on the September 30, Year 1 balance sheet. (Round your intermediate answers to the nearest dollar.) Group of answer choices $533, 791 $535, 349 $519,000 $534, 570
Prepare Hertog Company's journal entries to record the following transactions for the current year. May 7 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,990. June 6 Sells its entire investment in Kraft bonds for $11,510 cash. View transaction list Journal entry worksheet 1 2 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,990. Note: Enter debits before credits. Date May 07 Record entry General Journal Clear entry Debit Credit View general journal >
On May 1, Cedar Inc. purchases $150,000 of 10-year, Knox Corporation 8% bonds dated March 1 at 100 plus accrued interest. Required: Journalize the entry to record the semiannual receipt of interest on March 1, Year 2. Refer to the Chart of Accounts for exact wording of account titles.
Selected debt investment transactions for Easy A Inc., a retail business, are listed below. Easy A Inc. has a fiscal year ending on December 31. Year 1: Feb. 1 May 1 Jun. 1 Sept. 1 Oct. 1 Dec. 1 Dec. 31 Year 2: Mar. 1 Jun. 1 Sept. 1 Bought $35,000 of 6%, XYZ Co. 12-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on June 1 and December 1. Bought $200,000 of Simple Tree 5%, 20-year bonds at their face amount plus accrued interest of $2,500. The bonds pay interest semiannually on March 1 and September 1. Received semiannual interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Sold $15,000 of Simple Tree bonds at 102% plus accrued interest of $63. Received semiannual interest on the XYZ Co. bonds. Accrued $3,135 interest on the Simple Tree bonds. Accrued $175 interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Received semiannual interest on the XYZ Co. bonds. Received…
On September 1, Year 1, Parsons Company purchased $84, 000 of 10-year, 7% government bonds at 100 plus accrued interest. The semiannual interest payment dates are June 30 and December 31. Interest computations are done by the month. Required: a. Joumalize the entry for the bond purchase. b. Joumalize the receipt of interest on December 31 of the first year. c. Journalize the sale of the bonds on February 1 of the second year for 582, 000 plus accrued interest. If an amount box does not require an entry, leave it blank. a. Year 1 Sept. 1 b. Year 1 Dec. 31 c. Year 2 Feb. 1
Prepare Krum Company's journal entries to record the following transactions involving its short-term investments in available-for-sale debt securities, all of which occurred during the current year. a. On August 1, paid $62,000 cash to purchase Houtte's 11%, six-month debt securities ($62,000 principal), dated August 1. b. On October 30, received a check from Houtte for 90 days' interest on the debt securities in transaction a. (Use 360 days in a year. Do not round your intermediate calculations.) View transaction list Journal entry worksheet 1 On August 1, paid $62,000 cash to purchase Houtte's 11% six-month debt securities ($62,000 principal), dated August 1. 2 Note: Enter debits before credits. Transaction a. Record entry General Journal Clear entry Debit Credit View general journal
During two consecutive years, Antlers Company, Inc., completed the following transactions: Year 1 June 1 Issued $750,000 face value, 20-year, 12 percent bonds, dated June 1 of this year, at 103. Interest is payable semiannually on December 1 and June 1. Dec. 1 Paid semiannual interest on the bonds. 31 Recorded an adjusting entry for accrued interest payable. 31 Recorded an adjusting entry for amortization of premium on bonds. 31 Closed the Interest Expense account. Year 2 Jan. 1 Reversed the adjusting entry for accrued interest payable. June 1 Paid semiannual interest on the bonds. Dec. 1 Paid semiannual interest on the bonds. June 31 Recorded an adjusting entry for accrued interest payable. 31 Recorded an adjusting entry for amortization of premium on bonds. 31 Closed the Interest Expense account. Can I get some help for the second year?
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 $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. April 15 July 5 July 22 August 19 Purchased Sara Lee notes for $13,500. Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…