Harvey Corp. purchases 10% bonds with face values of $200,000 on January 1, 2017. The bonds are dated January 1, 2017, and will mature on January 1, 2022. The bonds will pay interest on December 31 of each year. Harvey pays $215,970 for the bonds to yield 8% (market rate). Harvey accounts for the bonds at FV-OCI. Harveys fiscal year end is December 31. Fair values of the bonds on December 31, 2017 and 2018 respectively are:

2017 2018

a. Prepare a table to show interest income, interest received and premium or discount amortization for the bonds for each of the five years.

$214,040

$207,280

2. Prepare all the necessary journal entries at the end of 2017, to record interest income and adjustments to fair value.

3. Prepare all the necessary journal entries at the end of 2018, to record interest income and adjustments to fair value.

4. Fair value of the bonds on Dec. 31, 2019 was 198,800. 50% of the bonds were sold on June 1, 2020 at 98. Prepare all journal entries for the sale