Fair Value Hedge: Put Options On June 15, 2022, Smithson Foods purchased $1,000,000 of 2.5 percent corporate bonds at par, and designated them as available-for-sale investments. On December 31, 2022, Smithson's year-end, the bonds are selling at 98.5. On February 1, 2023, the bonds are selling at 98. To hedge against a further price decrease on the bonds, Smithson purchased for $33,000 put options on the bonds, expiring January 30, 2024, at a strike price of 101. The intrinsic value of the puts was designated as the hedge instrument, and the time value is amortized to income on a straight-line basis. On December 31, 2023, the bonds were selling at 97 and the puts were selling for $42,000. On January 30, 2024, the bonds were selling at 96 and Smithson sold the puts for $50,000