1.On January 1, 2014, Corporation A purchases bonds in Corporation B. The bonds have a par value of $50,000 and a stated interest rate of 6%, with annual interest payments on December 31 and a maturity date of December 31, 2023. Corporation A purchases the bonds for $43,290 to yield 8% interest, and holds the bonds as available-for-sale. By December 31, 2014, the fair value of the bonds is $51,000. The company posts the journal entry for the interest payment on December 31, 2014. Which journal entry correctly adjusts the bonds to fair value?

a.Debit fair value adjustment (available-for-sale) 7,710. Credit unrealized holding gain or lossequity 7,710

b.Debit fair value adjustment (available-for-sale) 7,247; credit unrealized holding gain or lossequity 7,247

c.Debit fair value adjustment (available-for-sale) 4,247; credit unrealized holding fain or lossequity 4,247

On January 1, 2014, Corporation