Debt Investment Transactions, Available-for-Sale Valuation Year 1 Apr. 1. Purchased $54,000 of Smoke Bay 4%,10-year bonds at their face amount plus accrued interest of $360. The bonds pay interest semiannually on February 1 and August 1. May 16. Purchased $130,000 of Geotherma Co. 6%, 12-year bonds at their face amount plus accrued interest of $325. The bonds pay interest semiannually on May 1 and November 1. Aug. 1. Received semiannual interest on the Smoke Bay bonds. Sept. 1. Sold $21,600 of Smoke Bay bonds at 104 plus accrued interest of $72. Nov. 1. Received semiannual interest on the Geotherma Co. bonds. Dec. 31 Accrued $432 interest on Smoke Bay bonds. Dec. 31 Accrued $650 interest on Geotherma Co. bonds. Year 2 Feb. 1. Received semiannual interest on the Smoke Bay bonds. May 1. Received semiannual interest on the Geotherma Co. bonds. Required: 1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. May 16. 1. Journalize the entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. Aug. 1. Sept. 1. Nov. 1. Nov. 1. Dec. 31 Geotherma Co. Year 2 Feb. 1. May 1. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure? If the bonds are classified as available-for-sale securities, then the portfolio of bonds would need to be adjusted to . This would be accomplished by using a valuation allowance account and account