The following information is available for Quigley Company at December 31, 2014, regarding its investments.

The company did not have any investments prior to 2014.

Instructions
(a) Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as trading.
(b) Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as available-for-sale.
(c) Discuss how the amounts reported in the financial statements are affected by the entries in (a) and(b).

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Securities Cost Fair Value 500 shares of Runner Corporation common stock 25,000 7,000 shares of Sher-tor Corporation preferred stock 40,000 650,000 $675,000 $80,000