At January 1, 2005, the available-for-sale securities portfolio held by Howe Corporation consisted of the following investments:
1. 2,500 shares of Nester common stock purchased for $42 per share.
2. 1,500 shares of Long common stock purchased for $60 per share.
At December 31, 2005, the market values per share were Nester $36 and Long $64.
Instructions
(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2005.
(b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2005.