Instructions At the beginning of 2019, Ace Company had the following portfolio of investments in available-for-sale debt securities (all of which were acquired at par value): Security Cost 1/1/19 Fair Value A $35,000 $44,000 B Totals 53,000 $88,000 50,000 $94,000 During 2019, the following transactions occurred: Transactions: May July 3 1 Dec. 31 Security B C Purchased C debt securities at their par value for $50,000. Sold all of the A securities for $44,000 plus interest of $1,000. Received interest of $1,000 on the B and C securities. Additionally the following information was available: 12/31/19 Fair Value $56,000 53,000 Required: 1. Prepare journal entries to record the preceding information. 2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2019? 3. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for available-for-sale securities? Chart of Accounts CHART OF ACCOUNTS Ace Company General Ledger ASSETS 111 Cash 114 Investment in Available-for-Sale Securities 119 Allowance for Change in Fair Value of Investment 121 Accounts Receivable 141 Inventory 151 Supplies 152 Prepaid Insurance REVENUE 411 Sales Revenue 431 Interest Income 435 Gain on Sale of Available for Sale Securities EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense LIABILITIES 211 Accounts Payable 221 Notes Payable 224 Interest Payable 231 Salaries Payable EQUITY 311 Common Stock 331 Retained Earnings 391 Unrealized Holding Gain/Loss: Available for Sale Securities 513 Delivery Expense 515 Supplies Expense 521 Advertising Expense 523 Salaries Expense 531 Bad debt Expense 539 Miscellaneous Expenses 540 Interest Expense General Journal 1. Prepare journal entries to record the 2019 transactions. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST REF. DEBIT CREDIT 1 2 3 4 5 6 7 9 10 12 Analysis 2. What is the balance in the Unrealized Holding Gain/Loss account on December 31, 2019? $