Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities.
Aug. 2 Purchased Verizon bonds for $10,000.
Sep. 7 Purchased Apple bonds for$35,000.
12 Purchased Mastercard bonds for $20,000.
Oct. 21 Sold some of its Verizon bonds that had cost$2,000 for $2,100 cash.
23 Sold some of its Apple bonds that had cost$15,000 for $15,400 cash.
Nov. 1 Purchased Walmart bonds for$40,000.
Dec. 10 Sold all of its Mastercard bonds for $18,000 cash. Required
Prepare journal entries to record these transactions.
Prepare a table to compare the year-end cost and fair values of its trading debt securities. Year-end fair values: Verizon,$8,500: Apple, $22,000: and Walmart,$39,000.
Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.