Brooks Co. purchases debt investments as trading securities at a cost of $66,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $72,000.

1.Prepare the December 27 entry for the purchase of debt investments.

2. & 3.Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $33,000) for $34,500 cash.

1- Record purchase of trading securities.

Date General Journal Debit Credit

Dec. 27

2- Record the year-end adjustment to fair value, if any.

Date General Journal Debit Credit

Dec. 31

3- Record sale of trading securities.

Date General Journal Debit Credit

Jan. 3