Adjust FVA at Sale and Year-End Accounting for TS Debt Investment Measured at FV-NI On September 30 of Year 1, New Apple Inc. purchased $24,000 of Mack Corp. bonds. These bonds pay 5% cash interest annually on September 30 and mature September 30 in Year 11. The investment is classified as a TS investment and the company uses the effective interest method to amortize any bond discount or premium. The market rate on the bonds is 6%. Note: Round your answers to the following questions to the nearest whole dollar. Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). a. Do Mack Corp. bonds sell at a discount or premium? Discount Determine the selling price of the bonds. $ 0 b. Record the entry for the purchase of the bonds by New Apple Inc. c. Record the entry on December 31 of Year 1 to record interest revenue. d. Record the entry on December 31 of Year 1 to adjust the investment to fair value, determined to be $25,200 on December 31 of Year 1. e. Record the entry to sell the bonds on January 1 of Year 2 for $25,200, plus accrued interest under Accounting Treatment #2: Adjust the investment to fair value at the date of sale using FV-NI; then record the sale, eliminating the associated Fair Value Adjustment account balance. f. Record any required adjusting entries on December 31 of Year 2. Date Account b. Sept. 30, Year 1 To record purchase of investment c. Dec. 31, Year 1 Dr. Cr. 0 0 x 0 0 x 0 0 x 0 0 x 0 0 x To record interest. d. Dec. 31, Year 1 0 0 x 0 0 x To adjust investment to fair value. e. Jan. 1, Year 2 0 0 % 0 0 x 0 0 x 0 0 % To record sale of bond investment. f. Dec. 31, Year 2 0 0 x 0 0 x To record adjusting entry.