Headland Company purchased, on January $1,2020,$ as an available$-$for$-$sale security, $$88,000$ of the $12\%,5-$year bonds of Chester

Corporation for $$81,958,$ which provides an $14\%$ return.

Prepare Headland's journal entries for $($a$)$ the purchase of the investment, $($b$)$ the receipt of annual interest and discount amortization,

and $($c$)$ the year$-$end fair value adjustment. $($Assume a zero balance in the Fair Value Adjustment account.$)$ The bonds have a year$-$end

fair value of $$83,600.$ Assume effective$-$interest amortization is used. $($Round answers to $0$ decimal places, e$.$g$.1,225.$ Credit account titles

are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and

enter $0$ for the amounts.$)$

No$.$ Account Titles and Explanation

Debit

Credit

$($a$)$

Debt Investments

Cash

$($b$)$ Cash

Debt Investments

Interest Revenue

$($c$)$ Fair Value Adjustment

Unrealized Holding Gain or Loss $-$ Equity