[The following information applies to the questionsdisplayed below.]Mead Incorporated began operations in Year 1. Following isa series of transactions and events involving its long-termdebt investments in available-for-sale securities.Year 1January 20 Purchased Johnson & Johnson bonds for$28,200.February 9 Purchased Sony notes for $64,890.June 12 Purchased Mattel bonds for $50,500.December 31 Fair values for debt in the portfolio areJohnson & Johnson, $33,500; Sony, $53,350;and Mattel, $58,750.Year 2April 15Sold all of the Johnson & Johnson bonds for$33,500.July 5Sold all of the Mattel bonds for $42,850.July 22 Purchased Sara Lee notes for $20,500.Purchased Kodak bonds for $22,300.December 31 Fair values for debt in the portfolio areAugust 19Kodak, $22,825; Sara Lee, $22,000; and Sony,$66,000.Year 3February 27 Purchased Microsoft bonds for $159,800.June 21 Sold all of the Sony notes for $65,600.June 30 Purchased Black & Decker bonds for $60,400.August 3 Sold all of the Sara Lee notes for $18,750.November 1 Sold all of the Kodak bonds for $26,975.December 31 Fair values for debt in the portfolio areBlack & Decker, $60,600; and Microsoft,$160,600.2. Complete the following table that summarizes the (a)total cost, (b) total fair value adjustment, and (c) total fairvalue of the portfolio of long-term available-for-sale debtsecurities at each year-end. (Loss amounts should beindicated with a minus sign.)Debt Investments12/31/Year 112/31/Year 212/Long-Term AFS Securities (cost)Fair value adjustment-AFSLong-Term AFS Securities (Fair value)$0 $0 $ quired informatione following information applies to the questionsplayed below.]ad Incorporated began operations in Year 1. Following iseries of transactions and events involving its long-termt investments in available-for-sale securities.r1nuary 20 Purchased Johnson & Johnson bonds for$28,200.bruary 9 Purchased Sony notes for $64,890.June 12 Purchased Mattel bonds for $50,500.ember 31 Fair values for debt in the portfolio areJohnson & Johnson, $33,500; Sony, $53,350;and Mattel, $58,750.r 2April 15Sold all of the Johnson & Johnson bonds for$33,500.July 5 Sold all of the Mattel bonds for $42,850.July 22 Purchased Sara Lee notes for $20,500.ugust 19 Purchased Kodak bonds for $22,300.ember 31 Fair values for debt in the portfolio areKodak, $22,825; Sara Lee, $22,000; and Sony,$66,000.r3ruary 27 Purchased Microsoft bonds for $159,800.June 21 Sold all of the Sony notes for $65,600.June 30 Purchased Black & Decker bonds for $60,400.August 3 Sold all of the Sara Lee notes for $18,750.vember 1 Sold all of the Kodak bonds for $26,975.ember 31 Fair values for debt in the portfolio areBlack & Decker, $60,600; and Microsoft,$160,600.plete the following table that summarizes the (a)st, (b) total fair value adjustment, and (c) total fairf the portfolio of long-term available-for-sale debtes at each year-end. (Loss amounts should beed with a minus sign.)Debt Investments12/31/Year 112/31/Year 2$AFS Securities (cost)adjustment-AFSAFS Securities (Fair value)0 $12/31/Year 30 $0

Total cost refers to the compiled sum of expenses involved while producing a product.

Answered: orporated began operations in Year 1.…

orporated began operations in Year 1. Followi transactions and events involving its long-te stments in available-for-sale securities. 20 Purchased Johnson & Johnson bonds for $28,200.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 1PA: Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The...

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Victoria Company has investments in marketable securities classified as trading and available-for-sale. At the beginning of the year, the aggregate market value of each portfolio exceeded its amortized cost. During the year, Victoria sold some securities from each portfolio. At the end of the year, the aggregate amortized cost of each portfolio exceeded its market value. Victoria also has investments in bonds classified as held-to-maturity, all of which were purchased for face value. During the year, some of these bonds held by Victoria were called prior to their maturity by the bond issuer. Three months before the end of the year, additional similar bonds were purchased for face value plus 2 months accrued interest. Required: 1. Explain how Victoria accounts for: a. sale of securities from each portfolio b. each equity securities portfolio at year-end 2. Explain how Victoria accounts for the disposition prior to their maturity of the long-term bonds called by their issuer. 3. Explain how Victoria reports the purchase of the additional similar bonds at the date of the acquisition.
Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. April 15 July 5 July 22 August 19 Purchased Sara Lee notes for $13,500. Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $28,500. February 9 Purchased Sony notes for $62,640. June 12 Purchased Mattel bonds for $48,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $31,100; Sony, $53,150; and Mattel, $56,950. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $31,500. July 5 Sold all of the Mattel bonds for $41,450. July 22 Purchased Sara Lee notes for $19,900. August 19 Purchased Kodak bonds for $20,900. December 31 Fair values for debt in the portfolio are Kodak, $22,125; Sara Lee, $20,000; and Sony, $64,000. Year 3 February 27 Purchased Microsoft bonds for $159,600. June 21 Sold all of the Sony notes for $64,000. June 30 Purchased Black & Decker bonds for $58,400. August 3 Sold all of the Sara…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $28,200. Purchased Sony notes for $64,890. Purchased Mattel bonds for $50,500. Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. February 9 June 12 December 31 Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42,850. July 22 Purchased Sara Lee notes for $20,500. August 19 Purchased Kodak bonds for $22,300. December 31 Fair values for debt in the portfolio are Kodak, $22,825; Sara Lee, $22,000; and Sony, $66,000. Year 3 February 27 Purchased Microsoft bonds for $159,800. June 21 Sold all of the Sony notes for $65,600. June 30 Purchased Black & Decker bonds for $60,400. August 3 Sold all of the Sara Lee notes for $18,750. November 1 Sold all of the…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 July 5 July 22 August 19 Purchased Kodak bonds for $15,300. Purchased Sara Lee notes for $13,500. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Sold all of the Johnson & Johnson bonds for $23,500. Sold all of the Mattel bonds for $35,850. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara Lee notes for $9,750. November 1 Sold all of the…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $25,000. February 9 Purchased Sony notes for $59,490. June 12 Purchased Mattel bonds for $45,000. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $26,900; Sony, $49,050; and Mattel, $55,950. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $28,000. July 5 Sold all of the Mattel bonds for $39,000. July 22 Purchased Sara Lee notes for $17,100. August 19 Purchased Kodak bonds for $18,450. December 31 Fair values for debt in the portfolio are Kodak, $18,900; Sara Lee, $16,500; and Sony, $63,000. Year 3 February 27 Purchased Microsoft bonds for $161,000. June 21 Sold all of the Sony notes for $61,200. June 30 Purchased Black & Decker bonds for $54,900. August 3 Sold all of the Sara…
Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara…
[The following information applies to the questions displayed below.] Mead Incorporated 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 January 20 Purchased Johnson & Johnson bonds for $28,200. February 9 Purchased Sony notes for $64,890. Purchased Mattel bonds for $50,500. June 12 December 31 Fair values for debt in the portfolio are Johnson & Johnson, $33,500; Sony, $53,350; and Mattel, $58,750. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $33,500. July 5 Sold all of the Mattel bonds for $42,850. July 22 Purchased Sara Lee notes for $20,500. August 19 Purchased Kodak bonds for $22,300. December 31 Fair values for debt in the portfolio are Kodak, $22,825; Sara Lee, $22,000; and Sony, $66,000. Year 3 February 27 Purchased Microsoft bonds for $159,800. June 21 Sold all of the Sony notes for $65,600. June 30 Purchased Black & Decker bonds for $60,400. August 3…
Paris Inc. began operations in Year 1. Following is a series of transactions and events involving its longtermdebt investments in available-for-sale securities.Year 1Mar. 10 Purchased Apple bonds for $30,600.Apr. 7 Purchased Ford notes for $56,250.Sep. 1 Purchased Polaroid bonds for $28,200.Dec. 31 Fair values for debt in the portfolio are Apple, $33,000; Ford, $54,600; and Polaroid, $29,400.Year 2Apr. 26 Sold all of the Ford notes for $51,250.June 2 Purchased Duracell bonds for $34,650.June 14 Purchased Sears notes for $25,200.Nov. 27 Sold all of the Polaroid bonds for $30,600.Dec. 31 Fair values for debt in the portfolio are Apple, $31,000; Duracell, $32,400; and Sears, $27,600.Year 3Jan. 28 Purchased Coca-Cola bonds for $40,000.Aug. 22 Sold all of the Apple bonds for $25,800.Sep. 3 Purchased Motorola notes for $84,000.Oct. 9 Sold all of the Sears notes for $28,800.Oct. 31 Sold all of the Duracell bonds for $27,000.Dec. 31 Fair values for debt in the portfolio are Coca-Cola, $48,000,…
Paris Inc. began operations in Year 1. Following is a series of transactions and events involving its longterm debt investments in available-for-sale securities. Year 1 Mar. 10 Purchased Apple bonds for $30,600. Apr. 7 Purchased Ford notes for $56,250. Sep. 1 Purchased Polaroid bonds for $28,200. Dec. 31 Fair values for debt in the portfolio are Apple, $33,000; Ford, $54,600; and Polaroid, $29,400. Year 2 Apr. 26 Sold all of the Ford notes for $51,250. June 2 Purchased Duracell bonds for $34,650. June 14 Purchased Sears notes for $25,200. Nov. 27 Sold all of the Polaroid bonds for $30,600. Dec. 31 Fair values for debt in the portfolio are Apple, $31,000; Duracell, $32,400; and Sears, $27,600. Year 3 Jan. 28 Purchased Coca-Cola bonds for $40,000. Aug. 22 Sold all of the Apple bonds for $25,800. Sep. 3 Purchased Motorola notes for $84,000. Oct. 9 Sold all of the Sears notes for $28,800. Oct. 31 Sold all of the Duracell bonds for $27,000. Dec. 31 Fair values for debt in the portfolio are…