Powerpuff Corp. carries an account in its general ledger called investments, which contained the following debits for investment purchases and no credits.

February 1, 2010 | Blossom Company ordinary shares, P100par, 200 shares | P37,400 April 1, 2010 | Government bonds, 11%, due April 1,2020, interest

| payable April1 and October 1, 100 bonds of P1,000 par each | 100,000

July 1, 2010 | Buttercup Company 12% bonds, par P50,000, dated |

| March 1, 2010, purchased atpar plus accrued interest, |

interest payable annually on March 1, due March 1, 2030 | 52,000

a. Assuming that Powerpuffs business model is to trade these investments to profit from the price changes, prepare the journal entries necessary to classify the amounts into the proper accounts. b. Prepare the entry to record the accrued interest on December 31, 2010 The fair values of the securities on December 31, 2010, were:

Blossom Company shares P33,800 (1% interest) Government bonds 124,700 Buttercup Company bonds 58,600

Required: Use an MS excel spreadsheet to prepare a schedule indicating any fair value adjustment needed at December 31, 2010.