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Metlock Company purchased, on January 1, 2020, as an available-for-sale security. $67,000 of the 11%,...

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Accounting

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Metlock Company purchased, on January 1, 2020, as an available-for-sale security. $67,000 of the 11%, 5-year bonds of Chester Corporation for $62,287, which provides an 13% return. Prepare Metlock's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $63,650. Assume effective-interest amortization is used. (Round answers to 0 decimal places, eg. 1,225. 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 O for the amounts.)

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