Acc423 Intermediate Accounting: P17-9 At December 31, 2006, the available-for-sale equity portfolio

Acc423 Intermediate Accounting

P17-9 (Available-for-Sale Securities Entries and Financial Statement Presentation) At December 31, 2006, the available-for-sale equity portfolio for Steffi Graf, Inc. is as follows.
Security Cost Fair Value Unrealized Gain (Loss)
A 17,500 15,000 (2,500)
B 12,500 14,000 1,500
C 23,000 25,500 2,500
Total 53,000 54,500 1,500

Previous securities fair value adjustment balance—Dr. 400
Securities fair value adjustment—Dr. 1,100
On January 20, 2007, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees.

Instructions
(a) Prepare the adjusting entry at December 31, 2006 to report the portfolio at FMV.
(b) Show the balance sheet presentation of the investment related accounts at December 31, 2006. (Ignore notes presentation.)
(c) Prepare the journal entry for the 2007 sale of security A.
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