On February 1, 2021, Cromley Motor Products issued 6% bonds, dated February 1, with a face amount of $40 million. The bonds mature on January 31, 2025 (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 $55,000 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. EVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021 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, 2021 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023 5 Return to question Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Reg 3 Reg 4 Cromley Reg 4 Barnwell Prepare the journal entries to record the issuance of the bonds by Cromley and Barwell's investment on February 1, 2021. (IF no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round Intermediate calculations. Enter your answers in whole dollars.) No Debit Credit 1 Date General Journal February 01, 2021 Cash Discount on bonds payable Bonds payable OOO 2 February 01, 2021 Investment in bonds Cash O Return to quition turn to 4 166 mont Prepare the journal entries by Cromley to record a subsequent events related to the bonds through January 31, 2023. (1fm entry is required for a transactionevent, select "No journal entry required in the first account field. Do not round intermediate calations. Enter your answers in whole dollars) Date Canal Journal De Jy 31, 2021 Intereste Discount on bona paya Cash 2 December 31, 200 Interest expense Discount on bonds payas 3 January 31, 2022 rest expense Discount on bond investment Cash OOOO OOO OOO OO OOO 4 Ay 31, 2022 interest pense Discount on bonds payable Cash 5 December 31, 202 interest expense Premium on investment in bonds 6 January 31, 2023 Interest expert Discount on bonds payable Cash 4 Complete this question by entering your answers in the tabs below. Req! Reg 2A Reg 28 Reg Reg 4 Cromley Reg 4 tarnwell 6 Prepare the Journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (1f no entry is required for a transaction/event, select "No Soumal entry required in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) Debit Credi No 1 Date July 31, 2021 General Journal Cash Discount on investment in bondo O 2 December 31, 202, No Transaction Recorded
