FKG Inc. carries the following debt investments on its books at December 31, 2017, and December 31, 2018. All securities were purchased during 2017. Trading Securities: Company Cost Value, Dec. 31, 2017 Value, Dec. 31, 2018 A Company $25,000 $13,000 $20,000 B Company $13,000 $20,000 $20,000 C Company $35,000 $30,000 $25,000 Available for Sale Securities: Company Cost Value, Dec. 31, 2017 Value, Dec. 31, 2018 X Company $210,000 $130,000 $50,000 Y Company $ 50,000 $ 60,000 $70,000

Required:

(1.) Prepare the necessary journal entries for FKG on December 31, 2017, and December 31, 2018.

(2.) What net effect would the valuation of these debt investments have on 2017 net income?

(3.) What net effect would the valuation of these debt investments have on 2018 net income?