Day Systems had no short-term investments prior to 2011. It had the following transactions involving short-term investments

Question:

Day Systems had no short-term investments prior to 2011. It had the following transactions involving short-term investments in available-for-sale securities during 2011.
Feb. 6 Purchased 1,700 shares of Nokia stock at $41.25 per share plus a $1,500 brokerage fee.
15 Paid $10,000 to buy six-month U.S. Treasury bills (debt securities): $10,000 principal amount, 6% interest, securities dated February 15.
Apr. 7 Purchased 600 shares of Dell Co. stock at $39.50 per share plus a $627 brokerage fee.
June 2 Purchased 1,250 shares of Merck stock at $72.50 per share plus a $1,945 brokerage fee.
30 Received a $0.19 per share cash on the Nokia shares.
Aug. 11 Sold 425 shares of Nokia stock at $46 per share less a $525 brokerage fee.
16 Received a check for principal and accrued interest on the U.S. Treasury bills purchased February 15.
24 Received a $0.10 per share cash on the Dell shares.
Nov. 9 Received a $0.20 per share cash on the remaining Nokia shares.
Dec. 18 Received a $0.15 per share cash on the Dell shares.

Required
1. Prepare 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 values per share are: Nokia, $40.25; Dell, $41; and Merck, $59.
3. Prepare an adjusting entry, if necessary, to record the year-end fair value adjustment for the of short-term investments in available-for-sale securities.
Analysis Component
4. Explain the presentation of the fair value adjustment to Day’s short-term investments.
5. How do these short-term investments affect
(a) Its income statement for year 2011 and
(b) The equity section of its at the 2011 year-end?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...