The following transactions related to long-term bonds occurred for Givarz Corporation.

1996 Jan. 1 Purchased \(\$ 100,000\) Leslye Corporation \(9 \%\) bonds for \(\$ 100,000\).

July 1 Received interest on Leslye bonds.

Dec. 31 Accrued interest on Leslye bonds.

1997 Jan. 1 Received interest on Leslye bonds.

Jan. 1 Sold \(\$ 25,000\) Leslye bonds for \(\$ 30,500\).

July 1 Received interest on Leslye bonds.

\section*{Instructions}

(a) Journalize the transactions.

(b) Assume that the fair value of the bonds at December 31,1996 , was \(\$ 97,000\). These bonds are classified as available-for-sale securities. Prepare the adjusting entry to record these bonds at fair value.

(c) Show the balance sheet presentation of the bonds and interest receivable at December 31, 1996, and indicate where any unrealized gain or loss is reported in the financial statements.