Reference no: EM132323887

Question

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 $30,000.Sept. 7 Purchased Apple bonds for $55,000. 12 Purchased Mastercard bonds for $40,000.Oct. 21 Sold some of its Verizon bonds that had cost $3,000 for $3,100 cash. 23 Sold some of its Apple bonds that had cost $35,000 for $35,400 cash. Nov. 1 Purchased Walmart bonds for $60,000.Dec. 10 Sold all of its Mastercard bonds for $38,000 cash.

Required

1. Prepare journal entries to record these transactions.

2. make a table to compare the year-end cost and fair values of its trading debt securities. Year-end fair values: Verizon, $28,500; Apple, $32,000; and Walmart, $49,000.

3. Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.