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

Investment in Brava Company bonds: $394,750 cost; $429,093 fair value. Carperk intends to hold these bonds until they mature in 5 years.

Investment in Baybridge common stock: 29,500 shares; $313,826 cost; $341,129 fair value. Carperk owns 32% of Baybridge's voting stock and has a significant influence over Baybridge.

Investment in Duffa bonds: $161,848 cost; $174,472 fair value. This investment is not readily marketable and is not classified as held-to-maturity or trading.

Investment in Newton notes: $90,003 cost; $88,473 fair value. Newton notes are not readily marketable and are not classified as held-to-maturity or trading.

Investment in Farmers common stock: 16,300 shares; $98,688 cost; $104,807 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.