The following information shows Carperk Company's individual investments in securities during its current year, along with the December 31 fair values.

1. Investment in Brava Company bonds: $324,900 cost; $353,166 fair value. Carperk intends to hold these bonds until they mature in 5 years.
2. Investment in Baybridge common stock: 29,500 shares; $258,296 cost; $280,768 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge.
3. Investment in Duffa bonds: $133,209 cost; $143,599 fair value. This investment is not readily marketable and is not classified as held-to-maturity or trading.
4. Investment in Newton notes: $74,077 cost; $72,818 fair value. Newton notes are not readily marketable and are not classified as held-to-maturity or trading.
5. Investment in Farmers common stock: 16,300 shares; $81,225 cost; $86,261 fair value. This stock is marketable, and Carperk intends to sell it within the year. This stock investment results in Carperk having an insignificant influence over Farmers.

Required: 1. Identify whether each investment should be classified as a short-term or long-term investment. For each investment, indicate in which of the six investment classifications it should be placed. 2. Prepare a journal entry dated December 31 to record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year.

Identify whether each investment should be classified as a short-term or long-term investment. For each investment, indicate in which of the six investment classifications it should be placed.

	Type of Investment	Classification of Long-term Investment
a.
b.
c.
d.
e.

Prepare a journal entry dated December 31 to record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year.

Journal entry worksheet

• Record the fair value adjustment for the portfolio of available-for-sale debt securities. Carperk had no available-for-sale debt securities prior to this year.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31