14-5 (Algo) Issuer and investor; effective interest; amortization schedule; adjusting entries [LO14-2] On February 1, 2021, Cromley Motor Products issued 10% bonds, dated February 1, with a face amount of $60 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 12%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $60,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that indicate Cromley's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Determine the price of the bonds issued on February 1, 2021. (Do not round intermediate calculations. Enter your answer in whole dollars.) Price of the bonds Req 1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare amortization schedules that indicate Cromley's effective interest expense for each interest period during the term to maturity. (Do not round intermediate calculations. Enter your answers in whole dollars.) Payment Number Cash Payment Effective Interest Increase in Balance 1 2 3 4 5 6 7 8 Totals Outstanding Balance Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. (Do not round intermediate calculations. Enter your answers in whole dollars.) Payment Number Cash Payment Effective Interest Increase in Outstanding Balance Balance 1 2 3 4 5 6 7 8 Totals Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 Record the issuance of the bonds by Cromley. Note: Enter debits before credits. Date February 01, 2021 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 Record the Bond investment by Barnwell. Note: Enter debits before credits. Date February 01, 2021 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 3 4 5 6 Record the payment of interest for Cromley Company. Note: Enter debits before credits. Date July 31, 2021 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the accrued interest for Cromley Company. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 56 Record the payment of interest for Cromley Company. Note: Enter debits before credits. Date January 31, 2022 General Journal Debit Credit 7 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Cromley Company. Note: Enter debits before credits. Date July 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the accrued interest for Cromley Company. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the payment of interest for Cromley Company. Note: Enter debits before credits. Date January 31, 2023 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 3 4 56 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date July 31, 2021 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 56 Record the accrued interest for Barnwell Company. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit 7 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 12 3 4 56 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date January 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date July 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the accrued interest for Barnwell Company. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 Record the receipt of interest for Barnwell Company. Note: Enter debits before credits. Date January 31, 2023 General Journal Debit Credit Record entry Clear entry View general journal