Smith & Associates reports the following information on its December 31, 2013, balance sheet:

Available-for-sale securities $2,576,112

Less: Market adjustmentAFSS 63,612 $2,512,500

Support records of Smiths AFSS portfolio show the following debt securities:

Security	Amortized Cost	Market Value
$2,000,000 U.S. Treasury 11% bonds	$1,965,349	$1,912,500
$600,000 U.S. Treasury 10% bonds	610,763	600,000
Total	$2,576,112	$2,512,500

Interest dates on the treasury bonds are January 1 and July 1. The 11% bonds were purchased to yield 12% and the 10% bonds were purchased to yield 9%. Smith & Associates uses the revenue approach to record the purchase of bonds with accrued interest. During 2014 and 2015, Smith & Associates completed the following transactions related to AFSS investments.

2014

Jan. 1 Received semiannual interest on U.S. Treasury bonds.

April 1 Sold $1,000,000 of the 11% bonds at 102 plus accrued interest.

July 1 Received semiannual interest on bonds and then sold the 10% bonds at 97.5.

Nov. 1 Purchased $500,000 of 4-year, 8% U.S. Treasury bonds at

$517,185 plus accrued interest. Interest dates are January 1 and July 1. (Hint: use time-value calculations to determine the market rate.)

Dec. 31 Interest accrual.

Dec. 31 Market prices for securities were 11% bonds, 101.75; and 8% bonds, 101.

2015

Jan. 2 Received the semiannual interest on the U.S. Treasury bonds.

Feb. 1 Sold the remaining 11% U.S. Treasury bonds at 101 plus accrued

interest.

Instructions: Record the 2014 and 2015 journal entries.