On February 1, 2018, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2022 (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 $65,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required 1. Determine the price of the bonds issued on February 1, 2018 2-a. Prepare amortization schedules that indicate Cromley's effective interest expense for each interest period during the term to maturity 2-b. 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 February 1, 2018. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2020 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. (Enter your answers in whole dollars.) Cash Payment Outstanding Payment Number Effective Interest Increase in Balance Balance 60,644 $ 1,950 $ 2,426 O $ 4760| 61,120 O ,9502,445 1,950 1,950 1,950 1,950 1,950 1,950 495 515 535 557 579 602 588 19,9474,347 2,465 2,485 2,507 2,529 2,552 2,538 5 61,615 62,130 62,665 63,222 63,801 64,403 64,991 4 Totals $15,600 KReq 2A Req 3> Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 EReq 4 Cromley Req 4 Barnwell Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) Debit Credit No Date General Journal 60,623,716 February 01, 2018 Cash 4,376,2840| Discount on bonds payable 65,000,000 Bonds payable 65,000 February 01, 2018 Investment in bonds 4,356 60,644 Cash Discount on bond investment KReq 2B Req 4 Cromley
