Papayas bonds On April 1, 2020, Orchard acquired a $200,000, 6%, eight-year corporate bond issued by Papaya Limited for cash. The bond was dated January 1, 2020 with interest paid semi-annually on January 1 and July 1. Because the market rate of interest was 4% on that date, issue price for the bond was $228,637 plus interest for the three months from 1 January to March 31, 2020. The bonds were classified as held-for-collection-and-sale by Orchard and had a fair value of $210,000 plus accrued interest on December 31, 2020. All interests for 2020 were paid in full on time. In 2021, market interest rates increased to 6%, thus causing further drop in Papayas bonds. Alongside, Papaya Limited faced a downturn of sales and its debt financing ability had seriously deteriorated. Debt restructuring by Papaya was initiated and Orchard has revised the projected semi-annual coupon payments by Papaya from $6,000 to $5,000, starting with payment of July 1, 2022. Redemption payment remained unchanged. Impacts of all the aforesaid changes were reflected in value of Papayas bonds on December 31, 2021. All interests for 2021 were paid in full on time. On January 1, 2022, all the Papayas bonds were sold for cash at $195,000.

Required: Prepare necessary journal entries for each category of investment to record the abovementioned transactions, and fair value adjustments if applicable, in the relevant years. Present your answers for each item of investment separately, arranged from (a) to (e) as in the question. Where appropriate, record fair value adjustments of share investments in one account, and those of bond investments in another account. Notes: For all journal entries with gain or loss items, indicate whether the item should be recorded as income (i.e. XXX Income) or equity (i.e. XXX Equity). Items without such indications will be regarded as incorrect. Show all figures in dollar, and round off the numbers in your answers to the nearest dollar.