On January 1,2020, Knit Company Purchased 8% bonds in the face amount of 8,000,000.

The Bonds Mature on January 1, 2024 and were purchased for 8,670,000 to yield 6%. Interest is Payable Every December 31.

The business model for this Investment is to collect contractual cash lows and sell the bonds in the open market

Fair Value Effective Rate

December 31, 2019 7,740,000 9%

December 31, 2020 7,230,000 12%

On December 31, 2020, the entity changed the business model to collect contractual cash flow only.

On January 1,2021, the fair value of the bonds did not change

1. What Amount should be reported as interest Income for 2019
2. What is the Unrealized Loss as A component of other comprehensive Income
3. What cumulative unrealized Loss in other comprehensive income is recognized on December 31,2020
4. What amount should be reported as interest income for 2021

Solve and Provide Solution and Explanation for the following