Homework: Week Two Question 8, E16-2 (similar to) Part 1 of 5 Auburn Quinta Associates acquired $7,599,000 par value, 4%, 20-year bonds on their date of issue, January 1 of the current year. The market rate at the time of issue is 18% and interest is paid semiannually on June 30 and December 31. Quinta uses the effective interest rate method to account for this investment. Quinta does not intend to hold the investment until maturity nor will it actively trade the bonds. The fair value of the bonds at the end of the year of acquisition is $5,197,600. Read the requirements. HW Score: 1.82%, 0.4 of 22 points Points: 0 of 1 (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) Save (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Requirement a. Determine the purchase price of the investment in bonds. (Use the present value and future value tables, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest whole dollar.) The purchase price of the investment in bonds is $ Requirements a. Determine the purchase price of the investment in bonds. b. Prepare the journal entry to record the acquisition of the bond investment. c. Prepare the journal entries to record the interest income for the first year. d. Prepare the journal entry required to adjust the investment's carrying amount to fair value at year end, if necessary. Print Done