On January 2, 20X1, Core Co. purchased an investment of 80 Apple Inc $1,000, 10-year bonds with a stated rate of 8% for $85,619. At the date of the purchase, the market rate for bonds of similar riskiness was 7%. Interest is paid annually on December 31 of each year. Core Management classified the investment as available-for sale. The bonds have a year-end value of $84,000.

On January 2, 20X2, the bond rating changed for Apple Inc and the interest rate for investments of similar risk was 6.5% resulting in an increase in the fair value of the total investment to $87,987. Management for Core Co. decided to sell 40 of the bonds and reclassify the remaining 40 as trading securities. The Apple bonds held by the company had a year end value of $42,000.

1- How much interest revenue related to this investment will be reported on the income statement for 2018?

2-Ignoring taxes, what is the amount of impact on the income statement for 20X1 as a result of this investment?

3- Was your answer in Question 4 an increase or decrease to Net Income?

4- Ignoring taxes, what is the amount of impact to OCI for 20X2 as a result of this investment?