### 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

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Subject :- Accountion
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