Trading Securities At the beginning of 2019, Able Company had the following portfolio of investments in trad-ing securities (all of which were acquired at par value): LO 13.3 Security A B Totals Cost $20,000 30,000 $50,000 1/1/2019 Fair Value $25,000 29,000 $54,000 During 2019, the following transactions occurred: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $27,000 plus interest of $1,000. Dec. 31 Received interest of $7,600 on the B and C securities. Additionally the following information was available: Security B C 12/31/2019 Fair Value $29,000 52,500

Required: 1. Prepare journal entries to record the preceding information.

2. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for trading securities?