On January 1, 2020, Pronghorn Company purchased $416,000 worth of 8% bonds of Aguirre Co. for $383,877. The bonds were purchased to yield 10% interest. Interest is payable semi-annually, on July 1 and January 1. The bonds mature on January 1, 2025. Pronghorn Company uses the effective interest method to amortize the discount or premium. On January 1, 2022, to meet its liquidity needs, Pronghorn Company sold the bonds for $385,555, after receiving interest.

Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as FV-OCI. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1

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Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 5,275.)

Schedule of Interest Revenue and Bond Discount AmortizationEffective-Interest Method
Date		Interest Receivable Or Cash Received		Interest Revenue		Bond Discount Amortization		Carrying Amount of Bonds
1/1/20								$
7/1/20		$		$		$
12/31/20
7/1/21
12/31/21
7/1/22
12/31/22
7/1/23
12/31/23
7/1/24
12/31/24
Total		$		$		$

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Prepare the journal entries to record the semi-annual interest on July 1, 2020, and December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
July 1
Dec. 31

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Assuming the fair value of Aguirre bonds is $387,635 on December 31, 2021, prepare the necessary adjusting entry. (Assume that the fair value adjustment on December 31, 2020 was a debit of $3,510.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

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Prepare the journal entry to record the sale of the bonds on January 1, 2022, including reclassifying holding gains or losses to net income. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1
	(To adjust to fair value at date of disposal)
Jan. 1
	(To record disposal)
Jan. 1
	(To reclassify holding loss)

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List of Accounts