Year 1 Jan. Feb. June 20 Purchased bonds for $20,500. 9 Purchased Sony notes for $55,440. 12 Purchased Mattel bonds for $40,500. 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Dec. Year 2 Apr. July July Aug. Dec. 15 Sold all of the Johnson & Johnson bonds for $23.500. 5 Sold all of the Mattel bonds for $35,850. 22 Purchased Sara Lee notes for $13,500. 19 Purchased Kodak bonds for $15,300. 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 Feb. 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. Aug, 3 Sold all of the Sara Lee notes for $9,750. Nov. 1 Sold all of the Kodak bonds for $20,475 31 Fair values for debt in the portfolio are Black & Decker, $54,600, and Microsoft, $158,600. Dec. Required 1. Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available-for-sale debt securities. 2. Prepare a table that summarizes the (a) total cost, (b) total fair value adjustment, and (c) total fair value of the portfolio of long-term available-for-sale debt securities at each year-end. Check (26) Fair Value Adj, bal : 12/31/Year 1, $3,910 Dr: 12/31/Year 2, $5,085 Dr. (36) Unrealized Gain at 12/31/Year 3, $2,000 3. Prepare a 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.
