Arkenstone

Great precious stone that is the heirloom of the HOUSE OF DURIN.  It was discovered during the reign of THRAIN I in 2107 T.A.  It was the also known as the "Heart of the Mountain".  Thrain I's descendants took it with them to the Grey Mountains, but it returned to the The Lonely Mountain with them in 2590 T.A.  It was there in Erebor when Smaug, The Magnificent took that hall from Thror and the Dwarves of Erebor.  
It was later rescued from Smaug by Bilbo Baggins who secretly entered the Halls of the Lonely Mountain as part of the PARTY OF THORIN OAKENSHIELD.  Bilbo did not realize what it was and later tried to help end the stalemate between the Dwarves and the Men of Laketown and Elves of Mirkwood by giving it to Bard of Dale so he could bargain with it to avoid fighting the dwarves.  
After the victory at the The Battle of Five Armies the stone was returned to the dying Thorin Oakenshield, and remains with the currnt King Under the Mountain Dain, of the Iron Hills.