On January $1,2025,$ Crane Company purchased $4\%$ bonds, having a maturity value of $$640,000$ for

$$544,784.$ The bonds provide the bondholders with a $6\%$ yield. They are dated January $1,2025,$ and

mature January $1,2035,$ with interest receivable June $30$ and December $31$ of each year. Crane

Company uses the effective$-$interest method to allocate unamortized discount or premium. The

bonds are classified as available$-$for$-$sale. The fair value of the bonds at December $31$ of each yearend is as follows.

$2025$ $$546,0002028$ $$566,000$

$2026541,0002029586,000$

$2027536,000$

$($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

$2025.$

$($c$)$ Prepare the journal entry to record the recognition of fair value for $2026.$

$($Round answersto $0$ decimal places, e$.$g$.2,525.$ Credit account titles are automatically indented when the

amount is entered. Do not indent manually. If no entry isrequired,select $"$No Entry" for the account titles

and enter $0$ for the amounts. List all debit entries before credit entries.$)$

$($To record interest received$)$

$($To record fair value adjustment$)$