The Knopfler Company acquired $250,000 in bonds on January 2nd, 2019 paying $277,464. The bonds have a stated rate of 9%, a yield of 8%, and pay interest once a year on December 31. Knopfler has decided to classify these bonds as available for sale.

Required:

1) Prepare the journal entry(ies) necessary for December 31, 2019 assuming the bonds have a market value of $282,000.

2) Prepare the journal entry(ies) necessary for December 31, 2020 assuming the bonds have a market value of $258,000.

3) Prepare the journal entry necessary when they sell the bonds on January 10th 2021 for $259,000 (ignore interest).