At the beginning of 2013, Ace Company had the following portfolio of investments in available-for-sale securities (common stock):

During 2013 the following transactions occurred:
May 3 Purchased C securities (common stock) for $13,500.
July 16 Sold all of the A securities for $25,000.
Dec. 31 Received dividends of $800 on the B and C securities, for which the following information was available:

Required:
1. Prepare journal entries to record the preceding information.
2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2013?
3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities?

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12/31/12 Fair Value Security Cost $20,000 30,000 50,000 $25,000 29,000 $54,000 Totals 12/31/13 Security Fair Value $32,000 15,500