Second National Insurance Company provided this information for its trading securities portfolio:

Required:
1. Provide the journal entries to record the mark-to-market adjustment on December 31, 2007. Assume that Second National uses an account entitled Market adjustment—trading securities to adjust the cost of the trading portfolio to year-end market values. Show supporting calculations in good form.
2. Provide the entry to record the sale of Company B’s common shares on July 1, 2008. Assume that the last market adjustment for these shares was on December 31, 2007.
3. Provide the journal entry and supporting calculations for the mark-to-market adjustment on December 31, 2008.
4. Provide the journal entry and mark-to-market adjustment on December 31, 2009.
5. What would the entry to record the sale of Company B common shares on July 1, 2008 have been if this security had been considered an available-for-sale security? Ignore tax effects.

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Market Values Security Date Acquisition Cost 12/31/07 12/31/08 12/31/09 Company A Common 1/15/07 $50,000 $60,000 $55,000 $58,000 Company B Common 6/30/07 30,000 25,000 13,000* 10,000 Company C Preferred 2/1/08 20,000 25,000 18,000 Company D Warrants 5/1/09 10,000 12,000