Littock, Inc. purchased JJR Company’s $400,000 par value, 5%, 4-year bonds on January 1, 2018, for $359,604 and classified this investment as available for sale. The market rate on the date of issue was 8%. Interest is payable semiannually each June 30 and December 31. On December 31, 2018, the fair value of the investment was $350,000 and on December 31, 2019, was $360,050. Littock sold the investment on January 2, 2020, for $365,000. Littock did not invest in any additional available-for-sale securities in 2020. Prepare the journal entries for 2018 through 2020 and reconcile the gains and losses reported in other comprehensive income over the life of the investment.
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