On February 1, 2018, Cromley Motor Products issued 10% bonds, dated February 1 with a face value of $80,000,000. The bonds mature on January 31, 2022. 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 $100,000 of the bonds a long-term investment. The fiscal years of both firms end December 31.

Required:

For Cromley

a. Determine the sales price of the bonds on February 1, 2018.

b. Prepare an amortization schedule using the template provided.

c. In proper form, prepare Cromleys journal entries for 2018 and 2019.

d. In proper form, prepare Cromleys journal entries for January 31, 2022.

For Barnwell

a. Determine the purchase price of Barnwells $100,000 bonds on February 1, 2018.

b. Prepare an amortization schedule using the template provided.

c. In proper form, prepare Barnwells journal entries for 2018 and 2019.

d. In proper form, prepare Barnwells journal entries for January 31, 2022.