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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Problem 15-3A Debt investments in available-for-sale securities; unrealized and realized gains and losses LO P3
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[The following information applies to the questions displayed below.]
Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following.
Available-for-Sale Securities | Cost | Fair Value | ||||
Company A bonds | $ | 533,600 | $ | 492,000 | ||
Company B notes | 159,310 | 150,000 | ||||
Company C bonds | 661,900 | 641,950 | ||||
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
Jan. | 29 | Sold one-half of the Company B notes for $78,430. | ||
July | 6 | Purchased bonds of Company X for $120,800. | ||
Nov. | 13 | Purchased notes of Company Z for $267,100. | ||
Dec. | 9 | Sold all of the bonds of Company A for $524,100. |
The fair values at December 31 are B, $82,500; C, $609,100; X, $118,000; and Z, $279,000.
Problem 15-3A Part 3
3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stoll report on its income statement for this year?
![**Problem 15-3A: Debt Investments in Available-for-Sale Securities; Unrealized and Realized Gains and Losses**
**Scenario Overview:**
[The following information applies to the questions displayed below.]
Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following:
| Available-for-Sale Securities | Cost | Fair Value |
|-------------------------------|----------|------------|
| Company A bonds | $533,600 | $492,000 |
| Company B notes | 159,310 | 150,000 |
| Company C bonds | 661,900 | 641,950 |
**Transactions:**
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
- **Jan. 29**: Sold one-half of the Company B notes for $78,430.
- **July 6**: Purchased bonds of Company X for $120,800.
- **Nov. 13**: Purchased notes of Company Z for $267,100.
- **Dec. 9**: Sold all of the bonds of Company A for $524,100.
**Fair Values at December 31:**
- Company B: $82,500
- Company C: $609,100
- Company X: $118,000
- Company Z: $279,000
**Problem 15-3A Part 3**
**Question:**
What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stoll report on its income statement for this year?
**Answer Box:**
- **Loss: [ ]**](https://content.bartleby.com/qna-images/question/34b06b3a-cf06-42fd-a4ac-3963b5656154/3c70d9b9-8cc4-403b-97d1-0cc2beb61e27/9hcg98s_thumbnail.png)
Transcribed Image Text:**Problem 15-3A: Debt Investments in Available-for-Sale Securities; Unrealized and Realized Gains and Losses**
**Scenario Overview:**
[The following information applies to the questions displayed below.]
Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following:
| Available-for-Sale Securities | Cost | Fair Value |
|-------------------------------|----------|------------|
| Company A bonds | $533,600 | $492,000 |
| Company B notes | 159,310 | 150,000 |
| Company C bonds | 661,900 | 641,950 |
**Transactions:**
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
- **Jan. 29**: Sold one-half of the Company B notes for $78,430.
- **July 6**: Purchased bonds of Company X for $120,800.
- **Nov. 13**: Purchased notes of Company Z for $267,100.
- **Dec. 9**: Sold all of the bonds of Company A for $524,100.
**Fair Values at December 31:**
- Company B: $82,500
- Company C: $609,100
- Company X: $118,000
- Company Z: $279,000
**Problem 15-3A Part 3**
**Question:**
What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stoll report on its income statement for this year?
**Answer Box:**
- **Loss: [ ]**
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