During 2023, the following events occurred:

1. Sold 5,000 shares of BKD for $170,000.

2. Acquired 1,000 shares of Horton Common for $40 per share. Brokerage commissions totaled $1,000.

At 12/31/23, the fair values for Perez's investments were:

BKD Common, $28 per share

LRF Preferred, $110 per share

Horton Common, $45 per share

Instructions

(a) Prepare a schedule which shows the balance in the Fair Value Adjustment account at December 31, 2022 (after the adjusting entry for 2022 is made).

(b) Prepare a schedule which shows the aggregate cost and fair values for Perez's securities portfolio at 12/31/23.

(c) Prepare the necessary adjusting entry based upon your analysis in (b) above.