Here is the information from the image, transcribed and explained: --- **At December 31, 2024, the available-for-sale debt portfolio for Crane, Inc. is as shown:** | Security | Cost | Fair Value | Unrealized Gain/Loss | |----------|-------|------------|----------------------| | A | $15,000 | $18,000 | $3,000 (Gain) | | C | 20,000 | 19,000 | (1,000) (Loss) | | D | 25,000 | 24,000 | (1,000) (Loss) | | | $60,000 | $61,000 | $1,000 (Net Gain) | --- **Required:** (a) Prepare the adjusting entry to report the portfolio at fair value. --- **Solution:** - **Overall, 2024, Crane has an unrealized holding gain of $1,000** (which is the difference between the fair value and the cost: $61,000 - $60,000). - **Crane makes the following entry:** ``` Fair Value Adjustment (AFS) 1,000 Unrealized Holding Gain or Loss—Equity 1,000 ``` --- This entry adjusts the value of the available-for-sale debt securities to their fair value at year-end and recognizes the unrealized gain in equity (Other Comprehensive Income). If you need further analysis, explanation, or have follow-up questions regarding this topic, feel free to ask!