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On February 18, 2011, Union Corporation purchased 10,000 shares of IBM common stock as a long-term investment at $60 per share. On December 31, 2011, and December 31, 2012, the market value of IBM stock is $58 and $61 per share, respectively.
1.What is the appropriate reporting category for this investment? Why?
2.Prepare the adjusting entry for December 31, 2011.
3.Prepare the adjusting entry for December 31, 2012.