Debt Investments, Available for Sale. Kuban Company acquired $3,500,000 face value, 8% bonds as an available-for-sale investment on January 1 of the current year when the market rate of interest was 10%. Interest is paid annually each December 31. Kuban purchased the bonds, which mature in 12 years, for $3,023,042. Kuban amortizes the discount using the effective interest rate method. The fair value of the bonds at the end of the year is $3,000,000. Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition. Debt Investments, Trading. Using the information provided in BE16-2, prepare the entry to record the fair value adjustment if Kuban classified this investment as a trading security