Question 4 (25 points) On January 1, 2018, Investor Company purchased Investee Company bonds with a face value of $660,000. Investor Company paid $628,295.58 in cash for the investment. Investor Company treated the investment as Available-For-Sale. The bonds mature on December 31, 2020. The bonds pay 10% interest each December 31. At the time of the purchase, the market rate for bonds of identical risk and maturity was 12% Investor Company prepared the following amortization table for the bonds. Date Cash Disc. Amort. Carry Value 1/1/18 628.295.58 12/31/18 66,000.00 75,395.47 (9,395.47) 637,691.05 12/31/19 66,000.00 76,522.93 (10,522.93) 648,213.98 12/31/20 66,000.00 77,786.02 (11,786.02) 660,000.00 1. Prepare Investor's journal entry for the purchase of the bonds on January 1, 2018 (3 points) 2. Prepare Investor's journal entry for the receipt of interest on December 31, 2018 (3 points) Question 4 (continued) 3. Suppose at December 31, 2018, the bond has a Fair Market Value of 95. Give the journal entry at December 31, 2018 to mark the investment to market (3 points). 4. Give the Balance Sheet value of Investor's investment in Investee at December 31, 2018 and the total net income effect of all transactions relating to the investment in Investee for fiscal 2018. (8 points) Investment on Balance Sheet: Effect on Net Income