Question

Help Save & Exit Sub Problem 15-3A Recording, adjusting, and reporting long-term available-for-sale securities LO (The follow
Required information Required: 1. Prepare journal entries to record these transactions and events and any year-end fair value
Required information 2017 2018 2019 Prepare journal entries to record these transactions and events and any year-end fair val
Required information 2017 2018 2019 Prepare journal entries to record these transactions and events and any year-end fair val
0 0
Add a comment Improve this question Transcribed image text
Answer #1
1) Journal Entries
Date Account titles Debit Credit
2017
Jan.20 Long-Term Investments—AFS (J&J) (1300 x $20.80) + 270 $27,310
Cash $27,310
Purchased Johnson & Johnson shares
Feb.9 Long-Term Investments—AFS (Sony).(1500 x $46.50) +255 $70,005
Cash $70,005
Purchased Sony shares
June.12 Long-Term Investments—AFS (Mattel) (1800 x $27.30) + $225 $49,365
Cash $49,365
Purchased Mattel shares
Dec.31 Unrealized Loss - Equity $4,730
Market Adjustment—AFS (LT) $4,730
Annual adjustment to market values
Cost Fair Value Difference
j &j = 1300 x 21.80 $27,310 $28,340 $1,030
Sony = 1500 x 38.30 $70,005 $57,450 -$12,555
Mattel = 1800 x 31.20 $49,365 $56,160 $6,795
Total $146,680 $141,950 -$4,730
2018
Apr.15 Cash $30,385
Gain on Sale of Investments $3,075
Long-Term Investments—AFS (J&J) $27,310
Sold Johnson & Johnson shares [(1,300 x $23.80) - $555]
Jul.5 Cash $43,295
Loss on Sale of Investments $6,070
Long-Term Investments—AFS (Mattel) $49,365
Sold Mattel shares [(1,800 x $24.20) - $265]
Jul.22 Long-Term Investments—AFS (Sara Lee) (900 x $22.80 + 510 $21,030
Cash $21,030
Purchased Sara Lee shares
Aug.19 Long-Term Investments—AFS (Eastman Kodak $20,988
Cash $20,988
Purchased Eastman Kodak shares [(1200 x $17.30 + $228)
Dec. 31 Unrealized Loss - Equity $12,613
Market Adjustment—AFS (LT) $12,613
Annual adjustment to market values
Cost Fair value Profit/loss
Kodak $20,988 $23,460 $2,472
Sara lee $21,030 $18,270 -$2,760
Sony $70,005 $52,950 -$17,055
-$17,343
Fair Value Adjustment account:
Required balance $17,343 cr.
Unadjusted balance $4,730 cr.
Required change $12,613 cr.
2019
Feb.27 Long-Term Investments—AFS (Microsoft) $182,265
Cash $182,265
Purchased Microsoft shares [(2700 x $67.30) + $555]
June. 21 Cash $71,540
Gain on Sale of Investments $1,535
Long-Term Investments—AFS (Sony) $70,005
Sold Sony shares [(1,500 x $48.30) - $910].
jun. 30 Long-Term Investments—AFS (Black & Decker) $62,175
Cash $62,175
Purchased Black & Decker shares [(1,700 x $36.30) + $465]
Aug.3 Cash $14,430
Loss on Sale of Investments $6,600
Long-Term Investments—AFS (Sara Lee) $21,030
Sold Sara Lee shares [(900 x $16.55) - $465]
Nov.1 Cash $27,005
Gain on Sale of Investments $6,017
Long-Term Investments—AFS (E. Kodak) $20,988
Sold Eastman Kodak shares [(1200 x $23.05) - $655]
Dec.31 Market Adjustment—AFS (LT) $26,823
Unrealized Loss—Equity $17,343
Unrealized Gain—Equity $9,480
Annual adjustment to market values
Cost Fair market difference
Black & Decker $62,175 $66,810 4635
Microsoft $182,265 $187,110 $4,845
Total $9,480
Fair Value Adjustment account:
Required balance . $9,480 dr
Unadjusted balance $17,343 cr.
Required change $26,823 dr.
Add a comment
Know the answer?
Add Answer to:
Help Save & Exit Sub Problem 15-3A Recording, adjusting, and reporting long-term available-for-sale securities LO (The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT