(Answered) Problemassume the same information as in question 17 above

Accounting

Problem

Assume the same information as in Question 17 above except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year end is as follows.

2014: $430,000

2015: $425,000

2016: $420,000

(a) Prepare the journal entry at the date of the bond purchase.

(b) Prepare the journal entries to record the interest received and recognition of fair value for 2014.

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