E17-4 (Entries for Available-for-sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds on December 31 each year-end is as follows.

2011 $534,200

2012 $515,000

2013 $513,000

2014 $ 517,000

2015 $ 500,000

Instructions

1. Prepare the journal entry at the date of the bonds purchased.
2. Prepare the journal entries to record the interest received and recognition of fair value for 2011.
3. Prepare the journal entry to record the recognition of fair value for 2012.