intermediat accounting

18 19 11121314151617181.9 110 111 121 13 114 115 116 117 During the year 2018, the following independent transactions occurred for ABC Corporation: On January 1, 2019, XEROX Company purchased 10% bonds having a maturity value of $3,000,000 for $ 2,783,724. The bonds provide the bondholders with a 12% yield. They are dated January 1, 2019, and mature January 1, 2024, with interest received December 31 of each year. XEROX has an active trading strategy for these bonds. The fair value of the bonds at December 31 of each year end is as follows. Year 2019S 2020 2021 2022 2023 Fair value at 31/12 $ 3.020.000 $ 3,030,000 $ 2,090,000 $2,095,000 $3,000,000 Instructions a. Prepare the journal entries to record the interest received and recognition of fair value at 31/12/2019. (3 marks) b. On December 31, 2019, the balance sheet of Xerox Company reports a $10,000 debit balance in its Equity Securities Fair Value Adjustment account. The following information pertains to that portfolio: Security Carrying value Fair value at 31.12.2012 Fair value at 12:31 2020 $125,000 $160,000 $ 150,000 100,000 95,000 $110,000 175,000 125,000 145,000 Total $400,000 $ 380,000 $405,000 Prepare the journal entry to record the recognition of fair value for 2019 and 2020