Problem 15-2A Recording, adjusting, and reporting available-for-sale debt securities LO P3Skip to question [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 1Jan. 20 Purchased Johnson & Johnson bonds for $25,000.Feb. 9 Purchased notes of Sony for $59,490.June 12 Purchased bonds of Mattel for $45,000.Dec. 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,900; Sony, $49,050; and Mattel, $55,950.Year 2Apr. 15 Sold all of the bonds of Johnson & Johnson for $28,000.July 5 Sold all of the bonds of Mattel for $39,000.July 22 Purchased notes of Sara Lee for $17,100.Aug. 19 Purchased bonds of Kodak for $18,450.Dec. 31 Fair values for debt in the portfolio are Kodak, $18,900; Sara Lee, $16,500; and Sony, $63,000.Year 3Feb. 27 Purchased bonds of Microsoft for $161,000.June 21 Sold all of the notes of Sony for $61,200.June 30 Purchased bonds of Black & Decker for $54,900.Aug. 3 Sold all of the notes of Sara Lee for $13,800.Nov. 1 Sold all of the bonds of Kodak for $23,400.Dec. 31 Fair values for debt in the portfolio are Black & Decker, $57,300; and Microsoft, $159,500. Complete this question by entering your answers in the tabs below.Year 1Year 2Year 3Prepare 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 listView journal entry worksheeti. .NoDateGeneral JournalDebitCredit1Jan 20Debt investments - AFS25,000Cash25,000Feb 09Debt investments - AFS59,490Cash59,4903Jun 12Debt investments - AFS45,000Cash45,0004Dec 31Fair value adjustment - AFSUnrealized gain - Equity

If the fair value is more than the book value then it is a gain and if the fair value is less than…

Answered: blem 15-2A Recording, adjusting, and…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 24P

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Problem 15-2A Recording, adjusting, and reporting available-for-sale debt securities LO P3

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[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 $25,000.
Feb.	9	Purchased notes of Sony for $59,490.
June	12	Purchased bonds of Mattel for $45,000.
Dec.	31	Fair values for debt in the portfolio are Johnson & Johnson, $26,900; Sony, $49,050; and Mattel, $55,950.

Year 2

Apr.	15	Sold all of the bonds of Johnson & Johnson for $28,000.
July	5	Sold all of the bonds of Mattel for $39,000.
July	22	Purchased notes of Sara Lee for $17,100.
Aug.	19	Purchased bonds of Kodak for $18,450.
Dec.	31	Fair values for debt in the portfolio are Kodak, $18,900; Sara Lee, $16,500; and Sony, $63,000.

Year 3

Feb.	27	Purchased bonds of Microsoft for $161,000.
June	21	Sold all of the notes of Sony for $61,200.
June	30	Purchased bonds of Black & Decker for $54,900.
Aug.	3	Sold all of the notes of Sara Lee for $13,800.
Nov.	1	Sold all of the bonds of Kodak for $23,400.
Dec.	31	Fair values for debt in the portfolio are Black & Decker, $57,300; and Microsoft, $159,500.

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