Question

Help Save & Exit Sub Problem 15-3A Recording, adjusting, and reporting long-term available-for-sale securities LO (The following information applies to the questions displayed below P3 Grass Security, which began operations in 2017, invests in long-term available-for-sale securties. Following is a series of transactions and events determining its long-term investment activity 2017 Jan. 20 Purchased 1, 300 shares of 3ohnson & 3ohnson at $20.se per share plus a $270 commission. Feb. 9 Purchased 1,500 shares of Sony at $46.58 per share plus a $255 commission. June 12 Purchased 1,8e0 shares of Mattel at $27.30 per share plus a $225 commission. Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $21.80; Mattel, $31.28; and Sony, $38.30. 2018 Apr. 15 Sold 1,300 shares of Johnson & Johnson at $23.8e per share less a $555 commission. July 5 Sold 1,808 shares of Mattel at $24.28 per share less a $265 commission. July 22 Purchased 980 shares of Sara Lee at $22.80 per share plus a $510 commission. Aug. 19 Purchased 1,200 shares of Eastman Kodak at $17.38 per share plus a $228 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Kodak, $19.55; Sara Lee, $20.30; and Sony, $35.38. 2019 Feb. 27 Purchased 2,7e0 shares of Microsoft at $67.30 per share plus a $555 commission. Dune 21 Sold 1,s00 shares of Sony at $48.30 per share less a(n) $910 commission. June 30 Purchased 1,780 shares of Black & Decker at $36.30 per share plus a $465 comnission. Aug. 3 Sold 980 shares of Sara Lee at $16.55 per share less a $465 commission. Nov. 1 Sold 1,280 shares of Eastman Kodak at $23.05 per share less a(n) $655 commission. Dec. 31 Per share fair values for stocks in the portfolio are: Black & Decker, $39.3e; and Hicrosoft, $69.38. < Prev 8 9-10 of 10 Next >

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.