(APPENDIX) AVAILABLE-FOR-SALE SECURITIES Tolland Financial began operations in 2010 and invests in securities classified as available for sale. During 2010, it entered into the following available-for-sale security transactions:

Purchased 10,000 shares of DTR common stock at $50 per share Purchased 44,000 shares of MJO common stock at $22 per share At December 31, 2010, DTR common stock was trading at $62 per share and MJO common stock was trading at $21 per share.

Required:

. Provide the necessary adjusting entry to value the available-for-sale securities at fair market value.

. What is the income statement effect of this adjusting entry?

Exercises Exercise