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Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/20 12/31/21 12/31/22 Amortized cost $457,200 $521,200 $526,600 Fair value $462,700 $510,000 $526,600 (a) Indicate whether the bonds were purchased at a discount or at a premium Discount (6) Prepare the adjusting entry to record the bonds at fair value at December 31, 2020 The Fair value Adjustment account has a debit balance of $900 prior to adjustment Prepare the adjusting entry to record the bonds at fair value at December 31, 2021 (c) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts) (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $900 prior to adjustment Prepare the adjusting entry to record the bonds at fair value at December 31, 2021. la (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts) No. Date Account Titles and Explanation Debit Credit Dec (b) 31 2020 Investment Income 5500 5500 Fair Value Adjustment Dec (C) 31 2021 Fair Value Adjustment 31200 11200 Investment income

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