Smith Corporations debt investment information is as follows:

1/1 /20 Purchased $100,000, 9% bonds of Nathen Company bonds at 98 with an annual yield of 10%. The bonds pay interest annually on 12/31 and are classified as available-for-sale.

12/31/20 Received $9,000 interest for investments in Nathen Company bonds for 2020 (note: the discount of the bond investments should be amortized using the effective interest method when recording the receipt of $9,000 interest on 12/31/20).

12/31 /20 The market prices of the debt investments at 12/31/2020 was: Nathen company bonds, 99. The fair value adjustment account balance was zero prior to the fair value adjustment on 12/31/2020.

Required:

1. Prepare journal entries for the transactions occurred on 1/1/2020 and 12/31/2020.
2. Make the appropriate entry to apply the fair market valuation for the debt investments on 12/31/2020.
3. If the management reported the debt investments in Nathen as held-to-maturity securities what would be the value of investments in Nathen reported on 12/31/2020 balance sheet?