Refer to Practice 14–10. Make the adjusting journal entries for (a) and (b) and the computations for (c) and (d), assuming that the securities are accounted for using the equity method. Ignore the impact of the investee company income and dividends. The changes in value are not deemed to be “other than temporary.”

Data from Practice 14–10

On December 1, the company purchased securities for $4,000. On December 31, the company still held the securities. Make the necessary adjusting journal entry to record a change in value of the securities assuming that their December 31 fair value was (a) $5,200 and (b) $2,600. In addition, before considering the impact of the change in value of the securities, the net income for the company was $3,000.