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A five-year $100,000 bond with a 6% stated interest rate and a 9% yield rate is purchased on 12/31/09 for $88,331. The bond matures on 12/31/14. Interest is to be received at the end of each year. The following amortization schedule reflects interest to be received, interest, revenue, amortization of bond discount and amortized cost of the bond investment at year end. Effecthe Interest Amortization Schedule End of Period Cash Date Payment Interest Amortization Unamortized 12/31/09 11,669 12/31/10 6,000 1,950 9.719 12/31/11 6,000 2.125 7594 12/31/12 6,000 2,317 5.277 12/31/13 6,000 8.525 2,525 12/31/14 6,000 8,752 2.752 Net Carrying Value 88,331 90,281 92,406 94,723 97,248 100,000 3 5 The following presents a comparison of the amortized cost and market value (assumed) of the bond at year-end. Date Amortized cost Market Value Difference 12/31/09 88.331 88,331 12/31/10 90,281 88,000 (2,281) 12/31/11 92,406 94,500 2,094 12/31/12 94,723 96,500 1,777 12/31/13 97,248 98,500 1,252 12/31/14 100,000 100,000 Record the journal entries at 12/31/09, 12/31/10, and 12/31/11, assuming the bond is classified as available for sale (AFS). 12/31/09: 12/31/10