During the current year, Reed Consulting acquired long-term available-for-sale debt securities on July 1 at a $70,000 cost. At its December 31 year-end, these securities had a fair value of $58,000. This is the first and only time the company purchased such securities.
1. Prepare the July 1 entry to record the purchase of these debt securities.
2. Prepare the year-end adjusting entry related to these securities.