The following information relates to Sanders Company’s investment in trading securities for 2019:
Jan. 1 Purchased $30,000 face value of Busbin Company 8% bonds for $29,100. The market rate of interest is 10%, and interest on the bonds is payable each June 30 and December 31.
1 Purchased $40,000 face value of Murphy Company 10% bonds for $40,400. The market rate of interest is 9.8%, and interest on the bonds is payable each June 30 and December 31.
June 30 Collected the interest and the following information is available:

Security .........................................Fair Value
Busbin Company 8% ...................$29,160
Murphy Company 10% .................40,800
July 1 Purchased $25,000 face value of White Corporation 11% bonds for $23,000. The market rate of interest is 12%, and interest on the bonds is payable each June 30 and December 31.
Nov. 30 Sold the White bonds for $22,750 plus accrued interest.
Dec. 31 Sanders collected the interest, sold the Murphy bonds for $41,000, and the following information is also available:

Security ....................................................Fair Value
Busbin Company 8% bonds ...................$28,800

Required:
1. Prepare journal entries to record the previous information for 2019. Use the effective interest method and round all amounts to the nearest dollar. Assume that Sanders prepares semiannual financial statements.
2. Show the items of income or loss from investment transactions that Sanders reports for each 2019 semiannual income statement.
3. Show how the investment items are reported on each of the 2019 semiannual balance sheets, assuming that management expects to dispose of all investments within one year of purchase.