Kenseth Company has the following securities in its portfolio on December 31, 2025. None of these investments are accounted for under the equity method.

All of the securities were purchased in 2025.

In 2026, Kenseth completed the following securities transactions.

Kenseth’s portfolio of equity securities appeared as follows on December 31, 2026.

Instructions

Prepare the general journal entries for Kenseth Company for:

a. The 2025 adjusting entry.

b. The sale of the Gordon stock.

c. The purchase of the Earnhart stock.

d. The 2026 adjusting entry for the portfolio.

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Investments 1,500 shares of Gordon, Inc., common 5,000 shares of Wallace Corp., common 400 shares of Martin, Inc., preferred Cost $ 73,500 180,000 60,000 $313,500 Fair Value $ 69,000 175,000 61,600 $305,600