1. At the end of its first year, the trading securities portfolio consisted of the following common stocks.

   Cost Fair Value

   Atrium Corporation $ 46,500 $ 60,000

   Barnes Inc. 60,000 58,000

   Cantor Corporation 80,000 76,400

   $186,500 $194,400

   The unrealized gain or loss to be recognized under the fair value method is

   	a.	unrealized loss $1,500.
   	b.	unrealized gain $1,500.
   	c.	unrealized loss $7,900
   	d.	unrealized gain $7,900.

2. If bonds with a face value of $150,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to

   	a.	Bonds Payable for $150,000.
   	b.	Discount on Bonds Payable for $15,000.
   	c.	Paid-in Capital in excess of Par common stock for $15,000.
   	d.	Bonds Payable for $135,000.