Indigo Company invests $2,860,000 in 6% fixed rate corporate bonds on January 1, 2020. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now $2,984,000. Prepare journal entries for Indigo Company to (a) record the change in fair value at 12/31/20, assuming Indigo does not elect the fair value option; (b) record the transactions related to these bonds in 2020, assuming that Indigo Company elects the fair option to account for these bonds.

a. ____________

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b. ____________

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