Shaq Security, Which began operations in 2011, invests in long- term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity.
2011
Jan. 20 Purchased 900 shares of Johnson & Johnson at $18.75 per share plus $590
commission.
Feb. 9 Purchased 2,200 shares of Sony at $46.88 per share plus a $2,578 commission.
June. 12 Purchased 500 shares of Mattel at $55.50 per share plus an $832 commission.
Dec. 31 Per share fair values for stocks in the portfolio are Johnson & Johnson, $20.38;
Mattel, $57.25; Sony, $39.
2012
Apr. 15 Sold 900 shares of Johnson & Johnson at $21.75 per share less a $685 commission.
July. 5 Sold 500 shares of Mattel at $49.13 per share less a $491 commission.
July. 22 Purchased 1,600 shares of Sara Lee at $36.25 per share plus a $1,740 commission.
Aug. 19 Purchased 1,800 shares of Eastman Kodak at $28 per share plus a $1,260
commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Kodak, $31.75; Sara Lee, $30.00;
Sony, $36.50.
2013
Feb. 27 Purchased 3,400 shares of Microsoft at $23.63 per share plus a $1,606 commission.
June. 21 Sold 2,200 shares of Shares of Sony at $40.00 per share less a $2,640 commission.
June. 30 Purchased 1,200 shares of Black & Decker at $47.50 per share plus a $1,995
commission.
Aug. 3 Sold 1,600 shares of Sara Lee at $31.25 per share less a $1,750 commission.
Nov. 1 Sold 1,800 shares of Eastman Kodak at $42.75 per share less a $2,309 commission.
Dec. 31 Per share fair values for stocks in the portfolio are: Black & Decker, $56.50;
Microsoft, $28.
Required
1. Prepare journal entries to record these transactions and events and any year-end fair value
Adjustments to the portfolio of long-term available-for-sale 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 securities at each year-end.
3. Prepare a table that summarizes (a) the realized gains and losses and (b) the unrealized gains
losses for the portfolio of long-term available-for-sale securities at each year-end.