Assume the same information as in E17-3 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.

                               

Instructions
  (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 2013.
  (c) Prepare the journal entry to record the recognition of fair value for 2014.