On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bondsthat have a face value of $330,000. The Cortland bonds have astated interest rate of 5%. Interest is paid semiannually on June30 and December 31, and the bonds mature in 10 years. For bonds ofsimilar risk and maturity, the market yield on particular dates isas follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tablesprovided.):

January 1, 2021	11.0	%
June 30, 2021	12.0	%
December 31, 2021	14.0	%

Required:

1A - Bond fair value :
1. Calculate the price Ithaca would have paid forthe Cortland bonds on January 1, 2021 (ignoring brokerage fees),and prepare a journal entry to record the purchase.
2. Prepare all appropriate journal entries relatedto the bond investment during 2021, assuming Ithaca accounts forthe bonds as a held-to-maturity investment. Ithaca calculatesinterest revenue at the effective interest rate as of the date itpurchased the bonds.
3. Prepare all appropriate journal entries relatedto the bond investment during 2021, assuming that Ithaca chose thefair value option when the bonds were purchased, and that Ithacadetermines fair value of the bonds semiannually. Ithaca calculatesinterest revenue at the effective interest rate as of the date itpurchased the bonds.