On January 1, 2020, Novak Limited paid $532,528.30 for 12% bonds with a maturity value of $495,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Novak applies ASPE using the effective interest method, and has a December 31 year end. Assume that Novak hopes to make a gain on the bonds as interest rates are expected to fall. Novak accounts for the bonds at fair value with changes in value taken to net income, and separately recognizes and reports interest income. The fair value of the bonds at December 31 of each year end is as follows:

2020		$528,900.00
2021		$509,850.00
2022		$507,870.00
2023		$501,930.00
2024		$495,000.00

A) Prepare the journal entry at the date of the bond purchase. (Credit account 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 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Account Titles and Explanation	Debit	Credit

B) Prepare the journal entries to record interest income and interest received and recognition of fair value at December 31, 2020, 2021, and 2022. (Credit account 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 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record interest collected)
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record fair value adjustment)
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record interest collected)
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record fair value adjustment)
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record interest collected)
Dec 31, 2020Dec 31, 2021Dec 31, 2022
	(To record gain or loss)