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[The following information applies to the questions displayed below.] Brooks Company purchases debt investments as...

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Accounting

[The following information applies to the questions displayed below.] Brooks Company purchases debt investments as trading securities at a cost of $60,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $71,000.

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 $30,000) for $32,750 cash.

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