Slip Systems had no prior short-term investments prior to 2013. It had the following transactions involving short-term investments in available-for-sale securities during 2013.
Feb.6 - Purchased 3,400 shared of Nokia stock at $41.25 per share plus a $3,000 brokerage fee.
15 - Paid $20,000 to buy six-month U.S. Treasury bills (debt securities): $20,000 principal amount, 6% interest, securities dated February 15.
April 7 - Purchased 1,200 shares of Dell Co. stock at $39.50 per share plus a $1,255 brokerage fee.
June 2 - Purchased 2,500 shares of Merck Stock at $72.50 per share plus a $2,890 brokerage fee.
30 - Received a $0.19 per share cash dividend on the Nokia shares
Aug.11 - Sold 850 shares of nokia at $46 per share less a $1,050 brokerage fee.
16 - Received a check for principal and accrued interest on the US treasury bills purchases Feb. 15
24 - Received a $0.10 per share cash dividend on the Dell shares.
Nov. 9 - Received a $0.20 per share cash dividend on the remaining Nokia shares
Dec. 18 - Received a $0.15 per share cash dividend on the Dell shares.
1. Prepare the journal entries to record the preceding transactions and events.
2. Prepare a table to compare the year-end cost and fair values of the short-term investments in available-for-sale securities. The year-end fair value shares are: Nokia, $40.25; Dell,$40.50; and Merck, $59.
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.