[The following information applies to the questions displayed below.] Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $21,500. February 9 Purchased Sony notes for $56,340. June 12 Purchased Mattel bonds for $41,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $22,700; Sony, $46,950; and Mattel, $53,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $24,500. July 5 Sold all of the Mattel bonds for $36,550. July 22 Purchased Sara Lee notes for $14,300. August 19 Purchased Kodak bonds for $16,000. December 31 Fair values for debt in the portfolio are Kodak, $17,675; Sara Lee, $13,000; and Sony, $61,000. Year 3 February 27 Purchased Microsoft bonds for $159,400. June 21 Sold all of the Sony notes for $58,400. June 30 Purchased Black & Decker bonds for $51,400. August 3 Sold all of the Sara Lee notes for $10,650. November 1 Sold all of the Kodak bonds for $21,125. December 31 Fair values for debt in the portfolio are Black & Decker, $55,200; and Microsoft, $158,800. Required: 1. Prepare journal entries to record these transactions and the year-end fair value adjustments to the portfolio of long-term available- for-sale debt securities.