Investments

On January 1, 2022, Grouper and Lois Company purchased 12% bonds having a maturity value of $270,000 for $290,470.25. The bonds provide the bondholders with a 10\% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivable on December 31 of each year. Grouper and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows: (a) Prepare the journal entries to record the interest received and recognition of fair value for 2022. (Credit account vities are automatically indented when the 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, List all debit entries before credit entries. Round answers to 2 decimal ploces, eg. 52.75.) Prepare the joumal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $278,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (Credit occount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select 'No Entry' for the account titles and enter O for the amounts, List all debit entries before credit entries, Round answers to 2 decimal places, e.8. 52.75