The following transactions for Wolfe Corporation relate to long-term bonds classified as available-for-sale: 2018 Jan. 1 Purchased $50,000 Lake Corporation 10% bonds for $50,000. July 1 Received interest on Lake bonds. Dec. 31 Accrued interest on Lake bonds. Dec. 31 Market value of the bonds $55,000, prepare the adjusting entry to record bonds at market value. 2019 Jan. 1 Received interest on Lake bonds. Jan. 1 Sold $25,000 Lake bonds for $26,650. July 1 Received interest on Lake bonds. a) Journalize the transactions.

2018 Jan. 1 Purchased $50,000 Lake Corporation 10% bonds for $50,000.

Dr 10% bonds available for sale 50,000 Cr Cash 50,000

available for sale

July 1 Received interest on Lake bonds.

Dr Cash 2,500 Cr Interest revenue on 10% bonds available for sale 2,500

Dec. 31 Accrued interest on Lake bonds.

Dr Interest receivable 10% bonds available for sale 2,500 Cr Interest revenue 10% bonds available for sale 2,500

Dec. 31 Market value of the bonds $55,000, prepare the adjusting entry to record bonds at market value. 2019

Dr 10% bonds available for sale 5,000 Cr Unrealized gain - other comprehensive income 5,000

Jan. 1 Received interest on Lake bonds.

Dr Cash 2,500 Cr Interest receivable on 10% bonds available for sale 2,500

Jan. 1 Sold $25,000 Lake bonds for $26,650.

Dr Cash 26,650 Dr Unrealized gain - other comprehensive income 2,500 Cr 10% bonds available for sale 27,500 Cr Realized gain on 10% bonds available for sale 1,650

July 1 Received interest on Lake bonds.

Dr Cash 1,250 Cr Interest receivable on 10% bonds available for sale 1,250