Timmins Ltd. owns a number of investments in bonds. Timmins has a 31 December year end. 

Case A $3,000,000 bonds in Lakehead Corp. a publicly traded company. The bonds are currently classified as AC with an amortized cost of $3,250,000 as at December 31 and an effective interest rate of 4%, payable annually on 31 December. At the year end, the change in credit risk was assessed to be not significant. Expected credit losses are estimated to be $125,000 at the year end. At the year end, the fair market value of the bonds is $2,950,000.

Case B $2,000,000 bonds in Guelph Ltd. The bonds are not publicly traded. The bonds are currently classified as FVOCI Bonds. At the year end, the amortized cost and carrying amount is $1,890,000 with an effective interest rate of 5% payable annually on 31 December. At the year end assessment, it was determined that the credit risk of these bonds had changed significantly. Expected credit losses are estimated to be $225,000. The fair value of the bonds is estimated to be $1,530,000 at 31 December.

Case C $7,000,000 bonds in Ajax Corp. The bonds are publicly traded and classified as FVTPL. The bonds pay 3% interest annually on 31 December. The bonds have a current carrying value of $6,750,000 as at December 31. At the year end assessment, it was determined that the credit risk of these bonds had changed significantly. Expected credit losses are estimated to be $565,000. The fair value of the bonds as at 31 December is $6,122,000.

Required:

In each case, explain the accounting entries required to adjust the value of the investment at 31 December. Also determine the interest income to be recognized the following year.