(TCO B) The following information pertains to Fox Inc.’sportfolio of marketable securities for the Year ended Dec 31, Year1 and Dec 31, Year 2.
| Cost | Fair Value at 12/31 Year 1 | Year 2 Activity: Purchases | Year 2 Activity: Sales | Fair Value at 12/31 Year 2 |
| Trading Securities | | | | | |
| Smith Co. | $230,000 | $240,000 | | | $235,000 |
| Jones Co | $290,000 | $275,000 | | | $285,000 |
| Available for Sale Securities | | | | | |
| Williams's Co. | $270,000 | $245,000 | | $255,000 | N/A |
| Gores Co. | $250,000 | $235,000 | | | $265,000 |
| Held to Maturity Securities | | | | | |
| Martin Co. | | | 1,400,00 | | $1,250,000 |
Note 1: Fox Inc. uses US GAAP
Note 2: Fox Inc. uses valuation accounts to record changes in thefair value of its marketable securities
Note 3: The Martin Co. security was purchase at par value
Note 4: The decline in the value of Martin Co. is considered to beother than temporary
Requirement:
Record the journal entries for the following marketable securitiestransactions based on the information given in the table.
- (1) Mark to market journal entry for the Smith Co security at12/31 Year 1
- (2) Mark to market journal entry for the Williams Co securityat 12/31 Year 1
- (3) Mark to market journal entry for the Smith Co security at12/31 Year 2
- (4) Mark to market journal entry for the Williams Co securityat 12/31 Year 2
- (5) Journal entry to record purchase of Martin Co.Investment
- (6) Journal entry to record the impairment of Martin Co.Investment
