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. Problem 15-3A Part 1 and 2 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.
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. Problem 15-3A Part 1 and 2 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.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
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Chapter12: The Statement Of Cash Flows
Section: Chapter Questions
Problem 12.3E
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roblem 15-3A Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3
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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 | $ | 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.
Problem 15-3A Part 1 and 2
Required:
1. Prepare
2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-sale securities.
Transcribed Image Text:Required information
View transaction list
Journal entry worksheet
1
2
4
>
Sold one-half of the notes Company B for $78,430.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
Jan. 29
Cash
78,430
Loss on sale of debt investments
Debt investments - AFS
Record entry
Clear entry
View general journal
Transcribed Image Text:Required information
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
Amount
December 31 AFS Securities
Cost
Fair Value
Company B notes
Company C bonds
Company X bonds
Company Z notes
Total
$
0 $
Loss
Required 2 December 31 Balance in the Fair Value Adjustment account
Credit
Balance at beginning of year in the Fair Value Adjustment account
Credit
December 31 required adjustment to the Fair Value Adjustment account
Debit
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