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

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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

Skip 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 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.

Problem 15-2A Part 3
3. Complete the following table that summarizes (a) the realized gains and losses and (b) the unrealized gains or losses for the
portfolio of long-term available-for-sale debt securities at each year-end. (Losses should be indicated by a minus sign.)
Year 1
Year 2
Year 3
Realized gains (losses)
Sale of Johnson & Johnson
Sale of Mattel
Sale of Sony
Sale of Sara Lee
Sale of Kodak
Total realized gains (losses)
$
$
0 $
Unrealized gains (losses) at year-end

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