investment because Baker has the intent and the ability to hold the bonds for $10$ years. The effective rate on the bonds is $4\mathrm{.}5\%.$

c$.$ Prepare the journal entry for the purchase of the investment on January $1$ of Year $1.$

d$.$ Prepare the journal entries to record interest received on December $31$ of Year $1$ and December $31$ of Year $2.$

e$.$ Indicate the carrying value of the Chocolate bonds on Baker's December $31$ of Year $2$ balance sheet assuming that the fair value of the bonds on December $31$ of Year $2$ was $$10,400.$