E17-9 (L01) (Available-for-Sale Debt Securities Entries and Financial Statement Presentation) At December 31, 2017, the available-forsale debt ortfolio for Stef Graf, Inc. is as follows. Security Cost Fair Value Unrealized Gain (Loss) $17,500 $15,000 ($2,500) 12,500 14,000 1.500 23,000 25 500 2 500 Total $53,000 $54,500 1,500 Previous fair value adjustment balanceDr. Fair value adjustmentDr. $1,100 On January 20, 2018, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees. Instructions (a)Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value. The portfolio should be reported at the fair value of $54,500. Since the cost of the portfolio is $53,000, the unrealized holding gain is $1,500, of which $400 is already recognized. Therefore, the December 31, 2017 adjusting entry should be: Securities Fair Value Adjustment (Available-forSale) $1,100 Unrealized Holding Gain or LossEquity $1,100 (b)Show the balance sheet presentation of the investment-related accounts at December 31, 2017. (Ignore notes presentation.) The unrealized holding gain of $1,500 (including the previous balance of $400) should be reported as an addition to stockholders' equity and the Securities Fair Value Adjustment (Available-for-Sale) account balance of $1,500 should be added to the cost of the securities account