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$534,900 $492,000 Company B notes 159,290 145,000 Company C bonds 662,500 641,740 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 $78,130.July 6 Purchased bonds of Company X for $125,100.Nov. 13 Purchased notes of Company Z for $268,000.Dec. 9 Sold all of the bonds of Company A for $515,300.The fair values at December 31 are B, $80,300; C, $606,800; X, $101,000; and Z, $271,000.Required:1. 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.2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

Once the company declares or records either the equity and or the debt instrument or investment as…

Answered: Prepare journal entries to record these…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 16E

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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	$	534,900	$	492,000
Company B notes		159,290		145,000
Company C bonds		662,500		641,740

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 $78,130.
July	6	Purchased bonds of Company X for $125,100.
Nov.	13	Purchased notes of Company Z for $268,000.
Dec.	9	Sold all of the bonds of Company A for $515,300.

The fair values at December 31 are B, $80,300; C, $606,800; X, $101,000; and Z, $271,000.

Required:
1. 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.
2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.

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