Larkspur Company purchased, on January 1, 2020, as an available-for-sale security, $86,000 of the 7%, 5-year bonds of Chester Corporation for $79,310, which provides an 9% return.

Prepare Larkspurs journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $81,700. Assume effective-interest amortization is used.