Accounting for Debt SecuritiesAvailable-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. Hilyn uses the straight-line method to amortize bond discounts and premiums. Dec. 31 Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. Dec. 31 Made the adjusting entry to record the current fair value of the Cynad bonds. At December 31, the market value of the Cynad bonds was $790,000. 2017 June 30 Received the semiannual interest payment on the Cynad bonds and amortized the bond discount for six months. July 1 Sold the Cynad bond investment for $792,500 cash. Dec. 31 Made the adjusting entry to eliminate balances from the Fair Value Adjustment to Bond Investment account and the Unrealized Gain/Loss on Investments (Equity) account. Record the transactions and adiustments of Hilyn Comnany using inurnal entries. Record the transactions and adjustments of Hilyn Company using journal entries. General Journal Description Debit Credit Date 1/1/2016 0 To record purchase of debt securities. Cash 6/30/2016 To record receipt of interest earned on debt securities. 12/31/2016 Cash 0 To record receipt of interest earned on debt securities. 12/31/2016 To adjust debt securities to year-end fair value. Cash 6/30/2017 To record receipt of interest and amortization of debt securities. Cash 7/1/2017 0 To record sale of debt securities. 12/31/2017 To adjust account balances to zero