Kirkland Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities.

Aug.2Purchased Verizon bonds for $30,000.Sept.7Purchased Apple bonds for $55,000.12Purchased Mastercard bonds for $40,000.Oct.21Sold some of its Verizon bonds that had cost $3,000 for $3,100 cash.23Sold some of its Apple bonds that had cost $35,000 for $35,400 cash.Nov.1Purchased Walmart bonds for $60,000.Dec.10Sold all of its Mastercard bonds for $38,000 cash.

Required

1.Prepare journal entries to record these transactions.

2.make a table to compare the year-end cost and fair values of its trading debt securities. Year-end fair values: Verizon, $28,500; Apple, $32,000; and Walmart, $49,000.

3.Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.