Brief Exercise 17-2

Concord Company purchased, on January 1, 2017, as an available-for-sale security, $74,000of the11%,5-year bonds of Chester Corporation for $68,794, which provides an13% return.

Prepare Concord's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $70,300.

a)

1.

2.

b)

1.

2.

3.

c)

1.

2.