Data for investments in stock classified as trading securities are presented in EH-6. Assume instead that the investments are classified as available-for-sale securities LO15 with the same cost and fair value data. The securities are considered to be a long-term investment.

Instructions

(a) Prepare the adjusting entry at December 31, 2017, to report the securities at fair value.

(b) Show the statement presentation at December 31, 2017, after adjustment to fair value.

(c) Pam Jenks, a member of the board of directors, does not understand the reporting of the unrealized gains or losses on trading securities and available-for-sale securities. Write a letter to Ms. Jenks explaining the reporting and the purposes it serves.