Chapter 15, Problem E15.11E

To determine

Available-for-sale investments:

Available-for-sale investments are the investments which neither fall in the category of trading investments nor fall in the category of held-to-maturity investments.

They are recorded at fair market value. The effects of fluctuations in the prices i.e. increase or decrease in prices at the year-end are adjusted and unrealized gain or loss due to these fluctuations are transferred to other comprehensive income.

Other comprehensive income is not included in net income. Other comprehensive income are shown after net income in the income statement.

Requirement 1

To prepare:

Journal entries for transaction related to Peyton’s Investment

To determine

Requirement 2:

To prepare:

Partial balance sheet for Peyton’s Vedder investment as of December 31, 2018.

To determine

Requirement 3:

To prepare:

A comprehensive income statement for Peyton Investments