a On October 1, 2021, purchased $6 million of 3% Microsoft bonds at par value. These bonds pay interest on June 30 and December 31 of each year, and were classified as Held to Maturity (HTM).

b On November 1, 2021, purchased $3 million of 4% Amazon bonds at par value. These bonds pay interest on September 30 and March 31 of each year, and were classified as Available for Sale (AFS)

c On December 1, 2021, purchased $2 million of 3% US Treasury Bonds at par value, hoping to earn profits on short-term price increases driven by a decline in interest rates. These bonds were classified as Trading Securities. (TS)

d On December 31, 2021, received the interest payment ($45,000) on the Microsoft bonds purchased on October 1.

Requirements:

1 Prepare journal entries for the transactions in a. through d. above.

2 Prepare journal entries to accrue any interest receivable on the Amazon and US Treasury bonds at December 31, 2021

3 Assume that each of these investments increased by 10% between the time it was purchased, and December 31, 2021. Prepare any journal entries necessary to record unrealized gain as of December 31, 2021.

4 Prepare a short table that shows that impact of the above transactions for 2021 on

1 Net Income

2 Other Comprehensive Income, and

3 Comprehensive Income