On December 31, 2016, Zurich Corp. provided you with the following pre- adjustment information regarding its portfolio of investments held for short-term profit-taking:

During 2017, the Bilby Corp. shares were sold for $9,500. The fair values of the securities on December 31, 2017, were as follows: Moonstar Corp. shares $19,300 and Radius Ltd. shares $20,500. Dividends and other investment income and losses are all reported in one investment income account.
Instructions
(a) Prepare the adjusting journal entry needed on December 31, 2016.
(b) Prepare the journal entry to record the sale of the Bilby Corp. shares during 2017.
(c) Prepare the adjusting journal entry needed on December 31, 2017.

Transcribed Image Text:

December 31, 2016 Investments Moonstar Corp. shares Bilby Corp. shares Radius Ltd. shares Total portfolio Carrying Amount $20,000 10,000 20,000 $50,000 Fair Value $19,000 9,000 20,600 $48,600