Problem - Cardinal Paz Corp. carries an account in its general ledger called Investments, which contained debits for investment purchases, and no credits, with the following descriptions.

Feb. 1, 2014  Sharapova Company common stock, $110 par, 220 shares - $39,000                                              

April 1 U.S. government bonds, 10%, due April 1, 2024, interest payable April 1 and October 1, 112 bonds of $1,000 par each - $112,000                                         

July 1  McGrath Company 12% bonds, par $53,000, dated March 1, 2014, purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2034 - $57,240

(a) Prepare entries necessary to classify the amounts into proper accounts, assuming that all the securities are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(b) Prepare the entry to record the accrued interest and the amortization of premium on December 31, 2014, using the straight-line method. (Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(c) The fair values of the investments on December 31, 2014, were:

(d) The U.S. government bonds were sold on July 1, 2015, for $120,460 plus accrued interest. Give the proper entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)