Presented below is information relating to the purchase of common stock by Jamison Company December 31, 2016.

Cost Fair Value

Investment in Readfield Company common stock $125,000 $115,500

Investment in Lee Company common stock $100,000 $ 80,000

Investment in Stern Company common stock $250,000 $300,000

Investment in Jones Company common stock $180,000 $190,000

$655,000 $685,500

These investments are classified as trading security by Jamison who uses portfolio approach to account for those investments.

During the year 2017, Lee Company's stock was sold for $102,000. Jamison purchased common stock of Earnhart Company at a cost of $163,000.

At the end of December 2017, the fair values of the trading securities are as follows:

Readfield's common stock- $111,800, Stern's common stock- $310,000, Jones' common stock- $171600, and Earnhart's common stock- $159,250.

1. Make the adjustment entry for the portfolio at December 31, 2016 to report the fair value of investment in the balance sheet.

2. Prepare journal entry to record the sale of Lee Company's stock in Jamison's book in 2017.

3. Prepare journal entry to record the purchase of Earnhart's common stock by Jamison.

4. Calculate the fair value of the portfolio as of December 31, 2017.

5. Make the adjustment entry for the portfolio at December 31, 2017 to report the fair value of investment in the balance sheet.