On February 1, 2016, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $50 million. The bonds mature on January 31, 2020 (4 years). The market yield for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $50,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31.

1- Determine the price of the bonds issued on February 1, 2016. Price of Bonds: _____________

2- 1 Prepare amortization schedules that indicate Cromleys effective interest expense for each interest period during the term to maturity.

2-2 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 Febuary 1, 2016.

4- Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2018.