Refer to the information in BE17.4. Assume that, to address a measurement mismatch, Carow elects the fair value option for this debt investment. Prepare the journal entry at December 31, 2022, assuming the fair value of the bonds is €64,000.

Data from BE17.4.

Carow SA purchased on January 1, 2022, as a held-for collection investment, €60,000 of the 8%, 5-year bonds of Harrison, Inc. for €65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare Carow’s journal entries for 

(a) The purchase of the investment, 

(b) The receipt of semiannual interest and premium amortization.