Chapter AH, Problem H.8E

(a)

To determine

Trading securities: It refers to the buying and selling of short-term debt or equity securities to generate profits in the current period.

Available-for-sale securities: Available-for-sale are short-term or long-term debt equity securities that are not classified as trading or held to maturity securities. These securities are readily sold in the short-term to receive return on investment.

To Prepare: The adjusting entry of investment in trading securities.

(b)

To determine

To Prepare: The statement presentation of each class of securities and the related unrealized gain (loss) accounts.