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Brooks Co. purchases debt investments as trading securities at a cost of $76,000 on December...

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Accounting

Brooks Co. purchases debt investments as trading securities at a cost of $76,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $84,000. 1. Prepare the December 27 entry for the purchase of debt investments. 2. & 3. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $38,000) for $40,000 cash.

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