Stoll Company's long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale Securities Cost Company A bonds Company B notes Company C bonds $ 534,500 159,060 662,700 Fair Value $ 491,000 155,000 646,190 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,500. July 6 Purchased Company x bonds for $120,400. November 13 Purchased Company 2 notes for $267,700. December 9 Sold all of the Company A bonds for $524,600. Fair values at December 31 are B. $84,300; C, $601,500; X, $112,000; and Z, $270,000. Required: 1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities. 2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.

Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.

On January 2,22 , Hoosier Company purchased $930,000 of 10% bonds at face value. The bond market value was $980,000 on December 31, 20Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as:1. Trading securities.2. Securities available for sale.3. Held-to-maturity securities.