E$17\mathrm{.}4($L$01)($Entries for Available$-$for$-$Sale Securities$)$ Assume the same information as in E$17\mathrm{.}3$

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 revenue and recognition of fair value for $2020.$

c$.$ Prepare the journal entry to record the recognition of fair value for $2021.$ E$17\mathrm{.}4($LO $1)($Entries for Available$-$for$-$Sale Securities$)$ Assume the same information as in E$17\mathrm{.}3$ 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.

$2020$ $$320,5002023$ $$310,000$

$2021$ $$309,0002024$ $$300,000$

$2022$ $$308,000$

Instructions

a$.$ Prepare the journal entry at the date of the bond purchase.

b$.$ Prepare the journal entries to record the interest revenue and recognition of fair value for $2020.$ c$.$ Prepare the journal entry to record the recognition of fair value for $2021.$