The VanDuzer Company has the following footnote to its financial statements:

Note 4: Short-Term Investments

The company holds the following short-term investments at December 31 (in thousands):

	Cost	Market Value
Trading securities
U.S. government bonds	$670,000	$680,000
Held-to-maturity securities
Bonds issued by Beta Corp.	540,000	560,000
Available-for-sale securities
Common shares of Gamma Corp.	600,000	770,000

1. Compute the amount that VanDuzer would show on its balance sheet for short-term investments.

2. Suppose the market values of the three securities at the beginning of the year had been as follows (in thousands):

U.S. government bonds	$700,000
Bonds issued by Beta Corp.	580,000
Common shares of Gamma Corp.	710,000

Prepare journal entries to recognize the changes in market values that would be recorded in VanDuzers books at the end of the year.