3 Partially correct Mark 12.13 out of 25.00 Flag question Recording Entries for AFS Debt Securities- Effective Interest Method Adjust FVA at Year-End On July 1, 2020, West Company purchased for cash, eight $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries for 2021 Journal Entries and FS Presentation for 2020 a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Discount Amortization Amortized Cost Date Stated Interest Market Interest Jul. 1, 2020 $ Jan. 1, 2021 S 3,600 s Jul 1, 2021 3,600- 3,899 $ 3.913 299- 313 Bond 77.970 78.269 78,582 Check esc 800 000 000 $ 2 3 4 7 Recording Entries for AFS Debt Securities-Effective Interest Method Adjust FVA at Year-End On July 1, 2020, West Company purchased for cash, eight $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries for 2021 Journal Entries and FS Presentation for 2020 b. Record the entry for the purchase of the bonds by West Company on July 1, 2020. c. Record the adjusting entries by West Company on December 31, 2020, to accrue Interest revenue and adjust the investment to fair value. The fair value of the bonds at December 31, 2020, was $81,000. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round each amount to the nearest whole dollar. b. Date Account Name Jul. 1, 2020 Investment in AFS Securities Cash Dec. 31, 2020 Accumulated Other Comprehensive Incor Fair Value Adjustment-AFS Cash To accrue interest.revenue Dec. 31, 2020 Fair Value Adjustment-AFS) Interest Receivable To adjust investment to fait.value Dr. Cr. 0x v x x 0 x 0x = x 0x X x