During the current year, Reed Consulting Group acquired long-term available-for-sale securities at a

$70,000 cost. At its December 31 year-end, these securities had a market value of $58,000. This is the first and only time the company purchased such securities.

1 Prepare the necessary year-end adjusting entry related to these securities.

2 Explain how each account used in part 1 is reported in the financial statements.

AppendixLO1