Homework problem- Long term Investment

The information below relates to Wynn Corporation's investments classified as available-for-sale securities in 2017 and:

1/1/17Purchased $100,000 par value of Barr Company bonds at 97 with an annual yield of 10%.The bonds pay interest annually on 12/31. The annual interest rate is 9%.

9/5/17Purchased 3,200 shares of Pine, Inc. common stock for $25 per share.

12/31/17 Received $9,000 interest for investment in Barr Company bonds for 2017 (note: the discount should be amortized using the effective interest method when recording the receipt of the interest).

12/31/17 The market prices of the investments at 12/31/2017 were: Pine Inc. common stock $23 per share; and Barr company bonds, 99.Make the appropriate entries to apply the fair market valuation for these investments.

7/2/18 Wynn sold half of Pine, Inc. common stock for $36,160.

Required:

a. Prepare journal entries for the transactions occurred in 2017 (i.e., transactions on 1/1, 9/5 and 12/31), make the appropriate entries to apply the fair market valuation for these investments on 12/31/2017 and record the transaction of 7/2/2018.

b. If the management elected the fair value option for these investments, what would be the value of investments in Pine and Barr reported in 12/31/2017 balance sheet?

c. Under the fair value option, on what statement would the unrealized gain/loss be reported?

d. If the management reported the investment in Barr as held-to-maturity securities without electing the fair value option, what would be the value of investment in Barr reported in 12/31/2017 balance sheet (i.e., the amortized cost of Barr on 12/31/2017)?