Gruden Bancorp Inc. purchased a portfolio of trading securities during Year 1. The cost and fair value of this portfolio on December 31, Year 1, was as follows:
Name Number of Shares Total Cost Total Fair Value
Griffin Inc..............1,600.......................$ 40,000..........................$ 44,800
Luck Company.........1,250..........................37,500............................33,750
Wilson Company......1,000..........................40,000............................37,000
Total...................................................$117,500.........................$115,550
On May 10, Year 2, Gruden Bancorp Inc. purchased 1,200 shares of Carroll Inc. at $29 per share plus a $100 brokerage commission.
Provide the journal entries to record the following:
a. The adjustment of the trading security portfolio to fair value on December 31, Year 1.
b. The May 10, Year 2, purchase of Carroll Inc. stock.