Below is data regarding Reid, Inc.’s investments in Debt Securities which uses the portfolio approach to account for investments in bonds classified as Trading. (same process if Equity Securities using the Fair Value Method)

Record the purchase of Bond B

Record the fair value adjustment of Bond A and Bond B on December 31, 2020

Record the sale of Bond A on January 21, 2021

Record the fair value adjustment on December 31, 2021

Security Purchase Date Purchase Fair Value Fair Value Date Sold Selling Price Price December December 31, 2020 31, 2021 Bond A November 20, $500,000 $470,000 January 21, $470,000 2020 2021 Bond B December 20, $20,000 $24,000 January 15, $24,000 2020 2021 Bond C December 10, $ 75,000 $80,500 2021 Bond D December 28, $135,000 $134,500 2021 TAL