The following information relates to Starr Companys investment in available-for-sale bonds for 2018: Jan. 1 Purchased $30,000 face value of Bradford Company 8% bonds for $29,100. The market rate of interest is 10%, and interest on the bonds is payable each June 30 and December 31. Jan. 1 Purchased $40,000 face value of Morris Company 10% bonds for $40,400. The market rate of interest is 9.8%, and interest on the bonds is payable each June 30 and December 31. Jun. 30 Collected the interest and the following information is available: Security Fair Value Bradford Company 8% $29,160 Morris Company 10% 40,800 Jul. 1 Purchased $25,000 face value of Whipple Corporation 11% bonds for $23,000. The market rate of Interest is 12%, and interest on the bonds is payable each June 30 and December 31. Nov. 30 Sold the Whipple bonds for $22,750 plus accrued interest. Dec. 31 Starr collected interest on the Bradford and Morris bonds. Starr also sold the Morris bonds for $40,800, and the following information is also available: Security Fair Value Bradford Company 8% bonds $28,800 Required: 1. Prepare journal entries to record the previous information for 2018. Use the effective interest method. Assume that Starr prepares semiannual financial statements. 2. Show the items of income or loss from investment transactions that Starr reports for each 2018 semiannual income statement. 3. Show how the investment items are reported on each of the 2018 semiannual balance sheets, assuming that management expects to dispose of all investments within one year of purchase.