If the bonds in Question 8 are classified as available-for-sale and they have a fair value at December 31, 2008, of $1,802,000, prepare the journal entry (if any) at December 31, 2008, to record this transaction.

In Question 8

On July 1, 2008, Ingalls Company purchased $2,000,000 of Wilder Company’s 8% bonds, due on July 1, 2015. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $1,750,000 to yield 10%. Determine the amount of interest revenue Ingalls should report on its income statement for year ended December 31, 2008.