Eastwood Enterprises owns 36,000 bonds of the Van Cleef Company (5% of the outstanding debt of Van Cleef). Eastwood is trying to determine Van Cleefs fair value. The relevant facts are as follows:

• Eastwood bought the Van Cleef bonds earlier in the accounting period for $10.00/bond at a time when the bonds were publicly traded.
• Since Eastwood bought the bonds, Van Cleef has been delisted and there is no longer an active market in the Van Cleef bonds.
• Eastwoods internal valuation specialist estimates the Van Cleef bonds to be worth $8.60/bond. Eastwood plans to continue holding the bonds, but may someday sell them if their value increases sufficiently.

Required: 1. What is the fair value of Eastwoods investment in Van Cleef? 2. Prepare a journal entry to record any necessary fair value adjustment.