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Prepare journal entry to record recognition of fair value

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Problem

Assume the same information as in Question 17 above 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.

2014: $430,000

2015: $425,000

2016: $420,000

(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 2014.

(c) Prepare the journal entry to record the recognition of fair value for 2015.

Reference no: EM131784334

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