Required information

Use the following information for the Exercises below. (Algo)

[The following information applies to the questions displayed below.] Brooks Company purchases debt investments as trading securities at a cost of $54,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $69,000.

Exercise 15-2 (Algo) Accounting for debt investments classified as trading LO P1

1. Prepare the December 27 entry for the purchase of debt investments. 2. & 3. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $27,000) for $30,750 cash.