1. Identify how each security should be accounted for (Trading, Available-for-Sale, Held-to-Maturity or Equity Method).
2. At what amount would you report each security on the Balance Sheet as of December 31, 2013?
3. What is the amount of unrealized holding gain or loss for each security (if applicable) and in which account (Equity or Income) would you record the unrealized holding gain/loss for each applicable one?
4. Prepare the journal entries for the Equity Method transaction(s).
5. Prepare the journal entries to record any realized gains or losses on the sale of securities. Ignore any reclassification adjustments, if applicable.

Problem 2