Fair Value Hedge with Put Options In January, 2014, Combo Corporation purchased $200,000 of 5 percent government bonds at par for its trading portfolio, carried at market pursuant to ASC Topic 320. By late February, the bonds were selling at 98. To hedge against a further price decrease on these bonds, on March 1, 2014, Combo purchased March 2015 put options on these bonds at 101 for a premium of $3.10 per $100 of bonds. The intrinsic value of the puts is designated as the hedge instrument. By June 30, 2014, the company's fiscal year-end, the bonds were selling at 100 and the puts for $ 1.30. On December 31, 2014, when the bonds were selling at 97, Combo closed out its position by selling the puts for $4.30.
Required
Prepare Combo Corporation's journal entries during 2014 related to the puts and the hedged bonds.