90.2K

Verified Solution

Link Copied!

Required information Problem 15-2A Recording, adjusting, and reporting available-for-sale debt securities LO P3 [The following Information applies to the questions displayed below.) Mead Inc. 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 Jan. 20 Purchased Johnson & Johnson bonds for $23,500. Feb. 9 Purchased notes of Sony for $58,140. June 12 Purchased bonds of Mattel for $43,500. Dec. 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,100; Sony, $48,150; and Mattel, $54,150. Year 2 Apr. 15 Sold all of the bonds of Johnson & Johnson for $26,500 July 5 Sold all of the bonds of Mattel for $37,950. July 22 Purchased notes of Sara Lee for $14,900. Aug. 19 Purchased bonds of Kodak for $17,400. Dec. 31 Fair values for debt in the portfolio are Kodak, 518,375; Sara Lee, $15,000; and Sony, $61,800. Year 3 Feb. 27 Purchased bonds of Microsoft for $159,600. June 21 Sold all of the notes of Sony for $60,000. June 30 Purchased bonds of Black & Decker for $53,400 Aug 3 Sold all of the notes of Sara Lee for $12,450. Nov 1 Sold all of the bonds of Kodak for $22,425 Dec. 31 Fain values for debt in the portfolio are Black & Decker, 556,400; and Microsoft, $159,200. Problem 15-2A Part 1 Required: 1. Prepare journal entries to record these transactions and the year end fair value adjustments to the portfolio of long-term available for sale debt securities Complete this question by entering your answers in the tabs below. Year! Year 2 Year 3 Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available for sale debt securities View transaction lit Journal entry worksheet >

Answer & Explanation Solved by verified expert

See Answer