A. On January 1, 2020, West Co. purchased 160,000 of 6% bonds for 168,300 (a 5% effective interest rate) as a held-for-collection debt investment. Interest is paid on July 1 and January 1 and the bonds mature on January 1, 2025. Required: (Round all amounts to the nearest euro.) (a) Prepare the journal entry on January 1, 2020. (2 marks) (b) The bonds are sold on November 1, 2020 at 105 plus accrued interest. Record amortization and interest revenue on the appropriate dates by the effective-interest method. Prepare all entries required to properly record the sale. (9 marks) B. What are the main distinctions between a traditional financial instrument and a derivative financial instrument? (6 marks) C. SamSam Jewelry Group uses gold in the manufacture of its products. SamSam anticipates that it will need to purchase 500 ounces of gold in January 2021, for jewelry for the holiday shopping season. However, if the price of gold increases, SamSam's cost of sales will increase, which will reduce its profit margin. To hedge the risk of increased gold price, on October 1, 2020, SamSam enters into a gold futures contract and designates this futures contract as a cash flow hedge of the anticipated gold purchase. The notional amount of the contract is 500 ounces, and terms of the contract give SamSam the right and obligation to purchase gold at a price of $1,900 per ounce. The price will be good until the contract expires on January 31, 2021. The following data are available with respect to the price of gold inventory purchase. SamSam prepares financial statements on a quarterly basis. Date October 1, 2020 December 31, 2020 January 2, 2021 Spot Price for January Delivery $1,900 per ounce 2,000 per ounce 2,000 per ounce Additional information: 1. On January 2, 2021, SamSam purchased the gold for cash at the spot price and settled the futures contract. 2. On February 20, 2021, SamSam sells jewelry containing gold purchased in January 2021 for $1,156,000. The cost of the finished goods is $1,120,000. Required: Prepare all the necessary journal entries for SamSam on October 1, 2020, December 31, 2020, January 2, 2021, and February 20, 2021. (13 marks)