FKG Inc. carries the following debt and equity securities on its books at December 31, 2020. All securities were purchased during 2020.

Trading Securities

Company Cost Fair Value, 12/31/20 Fair Value, 12/31/21

Company A Investment $ 25,000 $ 13,000 $ 20,000

Company B Investment $ 13,000 $ 20,000 $ 20,000

Company C Investment $ 35,000 $30,000 $ 25,000

Available-for-Sale Securities

Company Cost Fair Value, 12/31/20 Fair Value, 12/31/21

Company X Investment $210,000 $130,000 $ 50,000

Company Y Investment $ 50,000 $60,000 $ 70,000

Required:

1. Prepared ALL the necessary journal entries for FKG on December 31, 2020 AND December 31, 2021
2. What net effect would the valuation of these debt and equity investments have on 2020 net income?
3. What net effect would the valuation of these debt and equity investments have on 2021 net income?