Caesar Corporation has the following information for its portfolio of trading securities at the end of the past 4 years:
Date .......................... Portfolio Cost ......................... Portfolio Market Value
12/31/2017 ..........................$162,300......................... $153,800
12/31/2018.......................... 109,600 ..........................106,200
12/31/2019.......................... 148,900 ..........................151,300
12/31/2020 ..........................139,000 ..........................138,700
Required:
1. Prepare the journal entries, if necessary, to adjust the allowance account at the end of 2018, 2019, and 2020.
2. What is the income statement effect of the 2020 entry?
3. How would your answer to Requirement 2 change if this was an available-for-sale portfolio?