1.Prepare journal entries to record the transactions.

2.Post to the investment accounts. (Use T-accounts.)

3.Prepare the adjusting entry at December 31, 2018 to report the portfolio at fair value.

4.Show the balance sheet presentation at December 31, 2018, for the investment-related accounts.

Problem 16-5A The following securities are in Frederick Company's portfolio of long-term available-for-sale securities at December 31, 2017. Cost 1,000 shares of Willhite Corporation common stock 1,300 shares of Hutcherson Corporation common stock 1,000 shares of Downing Corporation preferred stock $50,000 74,100 28,000 On December 31, 2017, the total cost of the portfolio equaled total fair value. Frederick had the following transactions related to the securities during 2018. Jan. 20 28 30 Feb. 8 Sold all 1,000 shares of Willhite Corporation common stock at $53 per share. Purchased 420 shares of $69 par value common stock of Liggett Corporation at $77 per share. Received a cash dividend of $1.30 per share on Hutcherson Corp. common stock. Received cash dividends of $0.70 per share on Downing Corp. preferred stock. Sold all 1,000 shares of Downing Corp. preferred stock at $27 per share. Received a cash dividend of $1.00 per share on Hutcherson Corp. common stock. Purchased an additional 950 shares of $15 par value common stock of Liggett Corporation at $81 per share. Received a cash dividend of $1.40 per share on Liggett Corporation common stock. 18 July 30 Sept. 6 Dec. 1 At December 31, 2018, the fair values of the securities were: Hutcherson Corporation common stock Liggett Corporation common stock $61 per share $71 per share Date Account Titles and Explanation Debit Credit Stock Investments > Date Account Titles and Explanation Debit Credit Frederick Company Balance Sheet (Partial) XXXXX