Problem 15-2A Recording, adjusting, and reporting short-termavailable-for-sale securities LO P3
[The following information applies to the questionsdisplayed below.]
Rose Company had no short-term investments prior to year 2017. Ithad the following transactions involving short-term investments inavailable-for-sale securities during 2017.
3. Prepare an adjusting entry, if necessary, torecord the year-end fair value adjustment for the portfolio ofshort-term investments in available-for-sale securities.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)
| Apr. | 16 | Purchased 4,000 shares of Gem Co.stock at $24.25 per share plus a $180 brokerage fee. |
| May | 1 | Paid $100,000 to buy 3-month U.S.Treasury bills (debt securities): $100,000 principle amount, 6%interest, securities mature on July 31. |
| July | 7 | Purchased 2,000 shares of PepsiCostock at $49.25 per share plus a $175 brokerage fee. |
| 20 | Purchased 1,000 shares of Xeroxstock at $16.75 per share plus a $205 brokerage fee. |
| Aug. | 1 | Received a check for principal andaccrued interest on the U.S. Treasury bills that matured on July31. |
| 15 | Received an $0.85 per share cashdividend on the Gem Co. stock. |
| 28 | Sold 2,000 shares of Gem Co. stockat $30 per share less a $225 brokerage fee. |
| Oct. | 1 | Received a $1.90 per share cashdividend on the PepsiCo shares. |
| Dec. | 15 | Received a $1.05 per share cashdividend on the remaining Gem Co. shares. |
| 31 | Received a $1.30 per share cashdividend on the PepsiCo shares. |
Prepare a table to compare the year-end cost and fair values ofRose's short-term investments in available-for-sale securities. Theyear-end fair values per share are: Gem Co., $25.00; PepsiCo,$45.25; and Xerox, $13.00.
