On January 1, 2020, Martinez Company purchased 5% bonds, having a maturity value of $490,000 for $420,359. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2027, with interest paid on June 30 and December 31 of each year. Martinez Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $421,000 2023 $441,000 2021 $416,000 2024 $461,000 2022 $411,000 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021. Date Account Titles and Explanation Debt Investments Debt Investments Jan. 1, 2020 Cash Jun. 30, 2020 Cash Debt Investments Interest Revenue Dec. 31, 2020 Cash Debt Investments Interest Revenue (To record interest received) Unrealized Holding Gain or Loss - Equity Fair Value Adjustment-Available-for-Sale (To record fair value adjustment) Debit 420359 12250 1000 1000 Credit 420359 12250 12250 1000 1000 1000 Dec. 31, 2020 Cash Debt Investments Interest Revenue (To record interest received) Unrealized Holding Gain or Loss - Equity 1000 1000 Fair Value Adjustment-Available-for-Sale (To record fair value adjustment) Dec. 31, 2021 Unrealized Holding Gain or Loss - Income 5000 Unrealized Holding Gain or Loss - Income Fair Value Adjustment 1000 1000 1000 5000