Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price, and holds these investments in its trading portfolio. The company's fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear's trading account occurred during December 2021 and the first week of 2022.

Required:

1. Prepare the appropriate journal entry or entries for each transaction.

2. Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.

Prepare the appropriate journal entry or entries for each transaction.

Purchased 135 Grocers' Supply Corporation bonds at par for $607,500.

Received interest of $3,400 from the Grocers' Supply Corporation bonds.

Record any necessary adjusting entry relating to the Grocers' Supply Corporation bonds on December 31. The market price of the bonds was $5,000 per bond.

Record the entry to adjust fair value of the investment on date of sale.

Sold the Grocers' Supply Corporation bonds for $641,250.

Indicate any amounts that Rantzow-Lear Company would report in its 2021 balance sheet and income statement as a result of this investment.