At the beginning of 2018, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value):

Security	Cost	1/1/18 Fair Value
A	$25,000	$31,000
B	38,000	36,000
Totals	$63,000	$67,000

During 2018, the following transactions occurred:

May 3	Purchased C debt securities at their par value for $50,000.
July 1	Sold all of the A securities for $31,000 plus interest of $1,000.
Dec. 31	Received interest of $1,000 on the B and C securities. Additionally the following information was available:

Security	12/31/18 Fair Value
B	$42,000
C	53,000

Required:

1.	Prepare journal entries to record the preceding information.
2.	What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2018?
3.	Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities?