On January 3, 2020, Prism purchased a high-risk 5-year debt instruments issued by Iffy Co at a sharp discount by paying $1,000,000 for an instrument that pays $1,500,000 on maturity. The effective interest rate was 5% per annum. The probability of a default in the life of the debt was 20% on January 3, 2020, but increased to 25% at December 31, 2020, Prism's financial year end. In the worst case scenario, only $10,000 is expected to be recovered. Ignore discounting. Prepare the journal entries for Prism for the year ended December 31, 2020.