Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/14 12/31/15 12/31/16 Amortized cost $491,340 $520,750 $550,460 Fair value $497,790 $509,740 $550,460 (a) Indicate whether the bonds were purchased at a discount or at a premium. (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of $1,290 prior to adjustment. (c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2015.