Stoll Co.’s long-term available-for-sale portfolio at the start of this year consists of the following.

Stoll enters into the following transactions involving its available-for-sale debt securities this year.

The fair values at December 31 are B, $81,000; C, $610,000; X, $118,000; and Z, $278,000.

Required

1. Prepare journal entries to record these transactions, including the December 31 adjusting entry to record the fair valueadjustment for the long-term investments in available-for-sale securities.

2. Determine the amount Stoll reports on its December 31 balance sheet for its long-term investments in available-for-salesecurities.

3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale debt securities does Stollreport on its income statement for this year?

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Fair Value Available-for-Sale Securities Company A bonds Company B notes. Company C bonds Cost $490,000 154,000 640,940 $535,300 159,380 662,750 Jan. 29 Sold one-half of the Company B notes for $79,200. July 6 Purchased Company X bonds for $126,600. Nov. 13 Purchased Company Z notes for $267,900. Dec. 9 Sold all of the Company A bonds for $515,000. The fair values at December 31 are B, $81,000; C, $610,000; X, $118,000; and Z. $278,000.