Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.

		12/31/17		12/31/18		12/31/19
Amortized cost		$461,100		$550,200		$604,300
Fair value		$466,500		$539,700		$604,300

(a) Indicate whether the bonds were purchased at a discount or at a premium.

DiscountPremium

(b)		Prepare the adjusting entry to record the bonds at fair value at December 31, 2017. The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment.
(c)		Prepare the adjusting entry to record the bonds at fair value at December 31, 2018.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
(b)	Dec. 31, 2017
(c)	Dec. 31, 2018