Bonita Corp. is a medium$-$sized corporation specializing in quarrying stone for building construction. The company has long dominated the market, at one time

achieving a $70\%$ market penetration. During prosperous years, the company's profits, coupled with a conservative dividend policy, resulted in funds available for

outside investment. Over the years, Bonita has had a policy of investing idle cash in equity securities$.$ In particular, Bonita has made periodic investments in the

company's principal vendor of mining equipment, Norton Industries. Although the firm currently owns $12\%$ of the outstanding common stock of Norton

Industries, Bonita does not have significant influence over the operations of Norton Industries.

Cheryl Thomas has recently joined Bonita as assistant controller, and her first assignment is to prepare the December $31,2025$ year$-$end adjusting entries for the

accounts that are valued by the "fair value" rule for financial reporting purposes. Thomas has gathered the following information about Bonita's pertinent

accounts.

Bonita has equity securities related to Delaney Motors and Patrick Electric. During $2025,$ Bonita purchased $110,000$ shares of Delaney Motors for

$$1,320,000$; these shares currently have a fair value of $$1,574,000.$ Bonita' investment in Patrick Electric has not been profitable; the company

acquired $47,000$ shares of Patrick in April $2025$ at $$21$ per share, a purchase that currently has a value of $$725,000.$

Prior to $2025,$ Bonita invested $$22,365,000$ in Norton Industries and has not changed its holdings this year. This investment in Norton Industries was

valued at $$21,538,000$ on December $31,2024.$ Bonita' $12\%$ ownership of Norton Industries has a current fair value of $$22,192,000$ on December $31,$

$2025.$

$($a$)$

Prepare the appropriate adjusting entries for Bonita as of December $31,2025,$ to reflect the application of the "fair value" rule for the securities described

above. $($List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,

select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit