At December 31, 2006, the available-for-sale equity portfolio for Steffi Graf, Inc. is as follows.
| Security | Cost | Fair Value | Unrealized Gain (Loss) |
| A | 17,500 | 15,000 | (2,500) |
| B | 12,500 | 14,000 | 1,500 |
| C | 23,000 | 25,500 | 2,500 |
| Total | 53,000 | 54,500 | 1,500 |
Previous securities fair value adjustment balance—Dr. 400
Securities fair value adjustment—Dr. 1,100
On January 20, 2007, Steffi Graf, Inc. sold security A for $15,100. The sale proceeds are net of brokerage fees.
Instructions
(a) Prepare the adjusting entry at December 31, 2006 to report the portfolio at FMV.
(b) Show the balance sheet presentation of the investment related accounts at December 31, 2006. (Ignore notes presentation.)
(c) Prepare the journal entry for the 2007 sale of security A.
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