Holly Company invests its excess cash in marketable securities. At the beginning of 2016, it had the following portfolio of investments in available-for-sale securities:

Security	Cost	12/31/15 Fair Value
400 shares of Igor Company common stock	$8,400	$9,400
700 shares of Ozone Company common stock	23,100	21,700
Totals	$31,500	$31,100

During 2016, the following transactions occurred:

Mar. 31	Purchased Union Company 8% bonds with a face value of $10,000 for $10,000 plus accrued interest; interest is payable on the bonds each June 30 and December 31.
May 17	Sold 200 shares of Ozone Company common stock for $30 per share.
June 30	Received the semiannual interest on the Union Company bonds.
Oct. 12	Sold 100 shares of Igor Company common stock for $24 per share.
Dec. 31	Received the semiannual interest on the Union Company bonds and dividends of $1 per share and $1.50 per share on the Igor and Ozone Company common stock, respectively.

The December 31 closing market prices were as follows: Igor Company common stock, $25 per share; Ozone Company common stock, $31 per share; Union Company 8% bonds, 101.

Required:

1.

Prepare journal entries to record the preceding information.

2.

Show what is reported on Hollys 2016 income statement.

3.

Assuming the investment in Igor Company stock is considered to be a current asset and the remaining investments are noncurrent, show how all the items are reported on Hollys December 31, 2016, balance sheet.

4.

If GAAP required that unrealized holding gains and losses on available-for-sale securities be included in income, how much would Holly recognize in 2016?

Prepare journal entries to record the 2016 transactions.

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GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
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Income Statement

Show what is reported on Hollys 2016 income statement. Additional Instructions

Holly Company

Partial Income Statement

For the Year Ended December 31, 2016

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Balance Sheet

Assuming the investment in Igor Company stock is considered to be a current asset and the remaining investments are noncurrent, show how all the items are reported on Hollys December 31, 2016, balance sheet. Additional Instructions

Holly Company

Partial Balance Sheet

December 31, 2016

1	Current assets:
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5	Noncurrent Assets:
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9	Shareholders Equity:
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Analysis

If GAAP required that unrealized holding gains and losses on available-for-sale securities be included in income, how much would Holly recognize in 2016?

____________ Unrealized holding gain OR Unrealized holding loss