Exercise 17-9 At December 31, 2017, the available-for-sale debt portfolio for Larkspur, Inc. is as follows. Security Cost Fair Value Unrealized Gain (Loss) A $37,625 $32,250 $(5,375 ) B 26,875 30,100 3,225 C 49,450 54,825 5,375 Total $113,950 $117,175 3,225 Previous fair value adjustment balanceDr. 860 Fair value adjustmentDr. $2,365 On January 20, 2018, Larkspur, Inc. sold security A for $32,465. The sale proceeds are net of brokerage fees.

Prepare the adjusting entry at December 31, 2017, to report the portfolio at fair value.

Show the balance sheet presentation of the investment-related accounts at December 31, 2017.

Prepare the journal entry for the 2018 sale of security A.