Tolland Financial began operators in 2020 and invests in securities classified as available-for sale.
During 2020, it entered into the following available-for-sale security transactions:
.........Purchased debt securities of DTR for $500,000
.........Purchased debt securities of MJO for $968,000
At December 31, 2020, the DTR debt securities were trading at $520,000 and the MJO debt securities are trading for $950,000.
Required:
1. Prepare the necessary adjusting entry to value the available-for-sale securities at fair market value.
2. What is the income statement effect of this adjusting entry?