Response to the following problem:
Deal Company, which began operations in 2011, invests its idle cash in trading securities. The following transactions relate to its short-term investments in its trading securities.
2011
Mar. 10 Purchased 1,200 shares of AOL at $59.15 per share plus a $773 commission.
May 7 Purchased 2,500 shares of MTV at $36.25 per share plus a $1,428 commission.
Sept. 1 Purchased 600 shares of UPS at $57.25 per share plus a $625 commission.
2012
Apr. 26 Sold 2,500 shares of MTV at $34.50 per share less a $1,025 commission.
Apr. 27 Sold 600 shares of UPS at $60.50 per share less an $894 commission.
June 2 Purchased 1,800 shares of SPW at $172 per share plus a $1,625 commission.
June 14 Purchased 450 shares of Walmart at $50.25 per share plus a $541.50 commission.
2013
Jan. 28 Purchased 1,000 shares of PepsiCo at $43 per share plus a $1,445 commission.
Jan. 31 Sold 1,800 shares of SPW at $168 per share less a $1,020 commission.
Aug. 22 Sold 1,200 shares of AOL at $56.75 per share less a $1,240 commission.
Sept. 3 Purchased 750 shares of Vodaphone at $40.50 per share plus an $840 commission.
Oct. 9 Sold 450 shares of Walmart at $53.75 per share less a $610.50 commission.
Required:
1. Prepare journal entries to record these short-term investment activities for the years shown. (Ignore any year-end adjusting entries.)
2. On December 31, 2013, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities when PepsiCo's share price is $41 and Vodaphone's share price is $37. (Assume the Fair Value Adjustment-Trading account had an unadjusted balance of zero.)