During 1990, Kest Corporation made five investments in equity securities. These securities, with their December 31, 1990, market values, are as follows:

a. Manor Corporation common stock, 3,000 shares, \(\$ 36,000\) cost, \(\$ 32,000\) market value. Purpose of investment is to develop a supplier relationship with Manor Corporation.

b. Blalock Company preferred stock, 1,000 shares, \(\$ 22,000\) cost, \(\$ 23,500\) market value. Purpose of investment is to earn dividends while holding as a source of cash for operations.

c. Cedar Company common stock, 1,500 shares, \(\$ 37,000\) cost, \(\$ 39,000\) market value. Purpose of investment is to hold for expected increase in value over the next few years.

d. Dipprey Corporation common stock, 1,200 shares, \(\$ 44,000\) cost, \(\$ 41,000\) market value. Purpose of investment is expected gains from increases in market value during next two years.

e. Neeley Company preferred stock, 800 shares, \(\$ 25,000\) cost, \(\$ 26,000\) market value. Purpose of the investment is to earn a return on surplus cash balances.

Calculate the lower-of-cost-or-market amount of the long-term portfolio of stock investments as of December 31, 1990. If necessary, prepare a journal entry dated December 31,1990 , to record any decline in market value. If a loss is recorded, explain how it should be reported by Kest Corporation.