Journ Co. purchased short-term investments in available-for-sale securities at a cost of $50,000 on November 25, 2008. At December 31, 2008, these securities had a market value of $47,000. This is the first and only time the company has purchased such securities.

1 Prepare the December 31, 2008, year-end adjusting entry for the securities’ portfolio.

2 For each account in the entry for part 1, explain how it is reported in financial statements.

3 Prepare the April 6, 2009, entry when Journ sells one-half of these securities for $26,000.

AppendixLO1