Question

Problem 15-2A Recording, adjusting, and reporting short-term available-for-sale securities LO P3

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Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.

3. Prepare an adjusting entry, if necessary, to record the year-end fair value adjustment for the portfolio of short-term investments in available-for-sale securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Apr.	16	Purchased 4,000 shares of Gem Co. stock at $24.25 per share plus a $180 brokerage fee.
May	1	Paid $100,000 to buy 3-month U.S. Treasury bills (debt securities): $100,000 principle amount, 6% interest, securities mature on July 31.
July	7	Purchased 2,000 shares of PepsiCo stock at $49.25 per share plus a $175 brokerage fee.
	20	Purchased 1,000 shares of Xerox stock at $16.75 per share plus a $205 brokerage fee.
Aug.	1	Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.
	15	Received an $0.85 per share cash dividend on the Gem Co. stock.
	28	Sold 2,000 shares of Gem Co. stock at $30 per share less a $225 brokerage fee.
Oct.	1	Received a $1.90 per share cash dividend on the PepsiCo shares.
Dec.	15	Received a $1.05 per share cash dividend on the remaining Gem Co. shares.
	31	Received a $1.30 per share cash dividend on the PepsiCo shares.

Prepare a table to compare the year-end cost and fair values of Rose's short-term investments in available-for-sale securities. The year-end fair values per share are: Gem Co., $25.00; PepsiCo, $45.25; and Xerox, $13.00.

Answer 1