The following was reported by Church Financial in its December 31, 2021, financial statements:

Investments at FVTPL, December 31, 2020 $11,000

Investments at FVTPL, December 31, 2021 15,000

Investment income or (loss) (500)

Additional information:

1. The investments at FVTPL are investments in equity securities held for trading purposes.

2. Investment income or loss consists of: holding gain on the FVTPL investments of $2,500, and loss on sale of the FVTPL investments of $3,000.

3. The carrying amount of the FVTPL investment sold was $4,000.

Instructions

a. What is the cash amount received on the sale of the investment?

b. Prepare the journal entries that were recorded by Church to record the sale of the investment and the holding gain on fair value adjustment at December 31, 2021.

c. Post the journal entries to the Investments at FVTPL T account.

d. Calculate the amount of investments purchased in 2021. Prepare the entry to record the purchase.