Reference no: EM132323894

Question

On September 15, Jerome, Inc., paid $8,900 to make a long-term investment in available-for-sale securities by purchasing notes of Topper, Inc. Complete the necessary journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Assume that Jerome's available-for-sale portfolio had a total cost of $50,000 and a fair value of $46,000 on December 31 at the end of the first year it held the AFS securities. Complete the necessary adjusting entry selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Jerome, Inc., owned a single short-term available-for-sale security with a cost of $40,000 and a fair value of $40,500 at December 31 of the previous year. At that time, an adjusting entry was recorded for the fair value adjustment with a debit to Fair Value Adjustment-Available-for-sale for $500 and a credit to Unrealized Gain-Equity for $500. Jerome sold that security for $39,900 on January 4 of the current year.

Complete the necessary journal entry for January 4th by selecting the account names from the pull-down menus and entering the dollar amounts in the debit and credit columns. (Assume that the portion of the entry that removes the balance in the Unrealized Gain-Equity and Fair Value Adjustment-Available-for-sale (ST) accounts will be made in a separate journal entry.)