The following was reported by Church Financial in its December 31, 2014, financial statements:

Trading investments, December 31, 2013................................$11,000

Trading investments, December 31, 2014..................................15,000

Gain on fair value adjustment................................................2,500

Loss on sale of trading investment...........................................3,000

The carrying value of the investments 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 gain on fair value adjustment at December 31, 2014.

(c) Post the journal entries to the Trading Investments T account.

(d) Calculate the amount of trading investments purchased in 2014. Prepare the entry to record the purchase.