Problem 15-3A Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3Skip to question [The following information applies to the questions displayed below.] Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following. Available-for-Sale SecuritiesCostFair ValueCompany A bonds$533,600 $492,000 Company B notes 159,310 150,000 Company C bonds 661,900 641,950 Stoll enters into the following transactions involving its available-for-sale debt securities this year. Jan. 29 Sold one-half of the Company B notes for $78,430.July 6 Purchased bonds of Company X for $120,800.Nov. 13 Purchased notes of Company Z for $267,100.Dec. 9 Sold all of the bonds of Company A for $524,100.The fair values at December 31 are B, $82,500; C, $609,100; X, $118,000; and Z, $279,000. Required 1Required 2Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-salesecurities.Fair Value Adjustment Computation -Available-for-Sale SecuritiesUnrealizedDecember 31 AFS SecuritiesCostFair ValueGain or Loss?AmountCompany B notes$79,655Company C bonds661,900609,100Company X bonds120,800118,000Company Z notes267,100Total$1,129,455 $727,100 $3LossRequired 2 December 31 Balance in the Fair Value Adjustment accountCreditBalance at beginning of year in the Fair Value Adjustment account70,860CreditDecember 31 required adjustment to the Fair Value Adjustment accountDebitBalance at beginning of year70,860 Required 1Required 2Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair value adjustment forthe long-term investments in available-for-sale securities.*******:View transaction listView journal entry worksheet... .:NoDateGeneral JournalDebitCredit1Jan. 29Cash78,430Loss on sale of debt investments1,225Debt investments - AFS79.6552Jul 06Debt investments - AFS120,800Cash120,8003Nov. 13Debt investments - AFS267,100Cash267,1004Dec. 9CashLoss on sale of debt investmentsDebt investments - AFSDec. 31Fair value adjustment - AFSUnrealized loss - EquityRequired 1Required 2 >

Dec. 9 Cash A/c 524,100 Debt investment AFS 492,000 Gain on available for sale…

Answered: No Date General Journal Debit Credit 1…

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 15-3A Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3

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[The following information applies to the questions displayed below.]

Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following.

Available-for-Sale Securities	Cost	Fair Value
Company A bonds	$	533,600	$	492,000
Company B notes		159,310		150,000
Company C bonds		661,900		641,950

Stoll enters into the following transactions involving its available-for-sale debt securities this year.

Jan.	29	Sold one-half of the Company B notes for $78,430.
July	6	Purchased bonds of Company X for $120,800.
Nov.	13	Purchased notes of Company Z for $267,100.
Dec.	9	Sold all of the bonds of Company A for $524,100.

The fair values at December 31 are B, $82,500; C, $609,100; X, $118,000; and Z, $279,000.

Required 1
Required 2
Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale
securities.
Fair Value Adjustment Computation -
Available-for-Sale Securities
Unrealized
December 31 AFS Securities
Cost
Fair Value
Gain or Loss?
Amount
Company B notes
$
79,655
Company C bonds
661,900
609,100
Company X bonds
120,800
118,000
Company Z notes
267,100
Total
$
1,129,455 $
727,100 $
3
Loss
Required 2 December 31 Balance in the Fair Value Adjustment account
Credit
Balance at beginning of year in the Fair Value Adjustment account
70,860
Credit
December 31 required adjustment to the Fair Value Adjustment account
Debit
Balance at beginning of year
70,860

Required 1
Required 2
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.
*******:
View transaction list
View journal entry worksheet
... .:
No
Date
General Journal
Debit
Credit
1
Jan. 29
Cash
78,430
Loss on sale of debt investments
1,225
Debt investments - AFS
79.655
2
Jul 06
Debt investments - AFS
120,800
Cash
120,800
3
Nov. 13
Debt investments - AFS
267,100
Cash
267,100
4
Dec. 9
Cash
Loss on sale of debt investments
Debt investments - AFS
Dec. 31
Fair value adjustment - AFS
Unrealized loss - Equity
Required 1
Required 2 >

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