1. On July 1, 2016, Rupar Retailers purchased $100,000 of Anand Company bonds at a discount price of $95,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 8% for bonds of similar risk and maturity. The bonds pay interest semi-annually on December 31, and June 30 of each year. Rupar accounts for the bonds as trading portfolio, and uses the effective interest method.

Required: Prepare Rupars journal entries for the following transaction, including calculation if needed.

1. The purchase of the Anand bonds on July 1,2016.
2. Interest revenue earned on December 31, 2016 with amortizaiton of discount.
3. Adjust for the fair value if needed at the year end of 2016, assuming the fair value is $98,000.
4. If Rupar sold the Anand Bond on January 5^th, 2017, when the market value of the bond is $97,000, record any entries necessary to update the fair-value adjustment and record the sale (ignore amortization for the 5 days after year end).