Stoll Company'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 $ 534,100 $ 492,000 Company B notes 159,140 155,000 Company C bonds 662,400 642,140 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,820. July 6 Purchased Company X bonds for $122,100. November 13 Purchased Company Z notes for $267,300. December 9 Sold all of the Company A bonds for $524,800. Fair values at December 31 are B, $82,300; C, $603,800; X, $120,000; and Z, $276,000. Problem 15-3A (Algo) 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 Company'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 $ 534,100 $ 492,000 Company B notes 159,140 155,000 Company C bonds 662,400 642,140 Stoll enters into the following transactions involving its available-for-sale debt securities this year. January 29 Sold one-half of the Company B notes for $78,820. July 6 Purchased Company X bonds for $122,100. November 13 Purchased Company Z notes for $267,300. December 9 Sold all of the Company A bonds for $524,800. Fair values at December 31 are B, $82,300; C, $603,800; X, $120,000; and Z, $276,000. Problem 15-3A (Algo) 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.
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 9E
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Stoll Company'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 | $ 534,100 | $ 492,000 |
| Company B notes | 159,140 | 155,000 |
| Company C bonds | 662,400 | 642,140 |
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
| January 29 | Sold one-half of the Company B notes for $78,820. |
|---|---|
| July 6 | Purchased Company X bonds for $122,100. |
| November 13 | Purchased Company Z notes for $267,300. |
| December 9 | Sold all of the Company A bonds for $524,800. |
Fair values at December 31 are B, $82,300; C, $603,800; X, $120,000; and Z, $276,000.
Problem 15-3A (Algo) 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:Fair Value Adjustment Computation - Available-for-Sale Securities
Cost
Fair Value
December 31 AFS Securities
Total
December 31 Balance in the Fair Value Adjustment account
0 $
Unrealized
Amount
Transcribed Image Text:<
2
Date
December
31
3
Record the year-end adjusting entry for the securities portfolio as of December
31.
Note: Enter debits before credits.
Record entry
5
General Journal
Clear entry
Debit
Credit
View general journal
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Transcribed Image Text:Fair Value Adjustment Computation - Available-for-Sale Securities
Cost
Fair Value
December 31 AFS Securities
Company B notes
Company C bonds
Company X bonds
Company Z notes
Total
$
$
79,570 $
662,400
122,100
267,300
1,131,370 $
December 31 Balance in the Fair Value Adjustment account
Balance at beginning of year in the Fair Value Adjustment account
December 31 required adjustment to the Fair Value Adjustment account
82,300
603,800
120,000
276,000
1,082,100
Unrealized
Amount
0
Loss
Credit
Credit
Debit
0
Transcribed Image Text:Journal entry worksheet
1
2
Date
December
31
3
Note: Enter debits before credits.
Record the year-end adjusting entry for the securities portfolio as of December
31.
4
Record entry
5
Fair value adjustment - AFS
Unrealized gain - Equity
General Journal
Clear entry
Debit
Credit
View general journal
Solution
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