Required information Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3 [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 $24,500. February 9 Purchased Sony notes for $59,040. June 12 Purchased Mattel bonds for $44,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,300; Sony, $49,750; and Mattel, $54,550. Year 2 April 15 July 5 July 22 Purchased Sara Lee notes for $16,700. August 19 Purchased Kodak bonds for $18,100. December 31 Fair values for debt in the portfolio are Kodak Sold all of the Johnson & Johnson bonds for $27,500. Sold all of the Mattel bonds for $38,650. Koda, $18,725; Sara Lee, $16,000; and Sony, $62,000. Year 3 February 27 Purchased Microsoft bonds for $161,200. June 21 Sold all of the Sony notes for $60,800. June 30 Purchased Black & Decker bonds for $54,400. August 3 November 1 Sold all of the Sara Lee notes for $13,350. Sold all of the Kodak bonds for $23,075. December 31 Fair values for debt in the portfolio are Black & Decker, $57,000; and Microsoft, $159,400.
Required information Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3 [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 $24,500. February 9 Purchased Sony notes for $59,040. June 12 Purchased Mattel bonds for $44,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,300; Sony, $49,750; and Mattel, $54,550. Year 2 April 15 July 5 July 22 Purchased Sara Lee notes for $16,700. August 19 Purchased Kodak bonds for $18,100. December 31 Fair values for debt in the portfolio are Kodak Sold all of the Johnson & Johnson bonds for $27,500. Sold all of the Mattel bonds for $38,650. Koda, $18,725; Sara Lee, $16,000; and Sony, $62,000. Year 3 February 27 Purchased Microsoft bonds for $161,200. June 21 Sold all of the Sony notes for $60,800. June 30 Purchased Black & Decker bonds for $54,400. August 3 November 1 Sold all of the Sara Lee notes for $13,350. Sold all of the Kodak bonds for $23,075. December 31 Fair values for debt in the portfolio are Black & Decker, $57,000; and Microsoft, $159,400.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Problem 15-2A (Algo) Part 2
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
Long-Term AFS Securities (cost)
Fair value adjustment-AFS
Long-Term AFS Securities (Fair value)
12/31/Year 1
$
2,560
2,560
12/31/Year 2
0
$
12/31/Year 3
2,085
![!
Required information
Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3
[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 $24,500.
February 9 Purchased Sony notes for $59,040.
June 12 Purchased Mattel bonds for $44,500.
December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,300; Sony, $49,750; and Mattel,
$54,550.
Year 2
April 15 Sold all of the Johnson & Johnson bonds for $27,500.
July 5 Sold all of the Mattel bonds for $38,650.
July 22 Purchased Sara Lee notes for $16,700.
August 19 Purchased Kodak bonds for $18, 100.
December 31 Fair values for debt in the portfolio are Kodak, $18,725; Sara Lee, $16,000; and Sony, $62,000.
Year 3
February 27 Purchased Microsoft bonds for $161,200.
June 21 Sold all of the Sony notes for $60,800.
June 30 Purchased Black & Decker bonds for $54,400.
August 3 Sold all of the Sara Lee notes for $13,350.
November 1 Sold all of the Kodak bonds for $23,075.
December 31 Fair values for debt in the portfolio are Black & Decker, $57,000; and Microsoft, $159,400.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef15f7a6-25d7-40a2-9077-df75f7df378b%2Fe3c7b975-f575-4842-a598-8761b1079fb4%2Fiuqvpoc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 15-2A (Algo) Recording, adjusting, and reporting available-for-sale debt securities LO P3
[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 $24,500.
February 9 Purchased Sony notes for $59,040.
June 12 Purchased Mattel bonds for $44,500.
December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,300; Sony, $49,750; and Mattel,
$54,550.
Year 2
April 15 Sold all of the Johnson & Johnson bonds for $27,500.
July 5 Sold all of the Mattel bonds for $38,650.
July 22 Purchased Sara Lee notes for $16,700.
August 19 Purchased Kodak bonds for $18, 100.
December 31 Fair values for debt in the portfolio are Kodak, $18,725; Sara Lee, $16,000; and Sony, $62,000.
Year 3
February 27 Purchased Microsoft bonds for $161,200.
June 21 Sold all of the Sony notes for $60,800.
June 30 Purchased Black & Decker bonds for $54,400.
August 3 Sold all of the Sara Lee notes for $13,350.
November 1 Sold all of the Kodak bonds for $23,075.
December 31 Fair values for debt in the portfolio are Black & Decker, $57,000; and Microsoft, $159,400.
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