One Tree Incorporated had the following portfolio of securities on December 31, 2007: The balances in the

Question:

One Tree Incorporated had the following of securities on December 31, 2007:

One Tree Incorporated had the following portfolio of securities

The balances in the market adjustment accounts as of January 1, 2007, were as follows:

Market Adjustment€”Trading Securities . . . . . . . . . . . . . . . . . . . . . . . . $8,000 Dr
Market Adjustment€”Available-for-Sale Securities . . . . . . . . . . . . . . . . . 2,500 Cr

During 2008, One Tree Inc. determined that certain securities should be reclassified.
Those reclassifications are as follows

Instructions:
1. Make the necessary journal entries to adjust One Tree€™s portfolio of securities to market value as of December 31, 2007.
2. Make the necessary journal entries to reclassify the securities in2008.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...