(Entries for Available-for-Sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each yearend 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 received and recognition of fair value for 2006.

(c) Prepare the journal entry to record the recognition of fair value for 2007.

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2006 $320,500 2009 $310,000 2007 $309,000 2010 $300,000 2008 $308,000