On July 1, 2021, Boston Company purchased for $145,937 cash, fifteen $10,000 bonds of Smith Corporation at a market rate of 6%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2024. The bonds are classified as trading securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. Required

a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Round each amount entered into the schedule to the nearest whole dollar. Adjust market interest in the final year of the bond term for any net rounding difference.

b. Record the entry for the purchase of the bonds by Boston Company on July 1, 2021.

c. Record the adjusting entries by Boston Company on December 31, 2021 to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on December 31, 2021, was $157,700. Round each amount to the nearest whole dollar.

d. Record the receipt of interest on January 1, 2022. e. Record the sale of all of the bonds on January 1, 2022, for $157,700. f. Record the adjustment to the Fair Value Adjustment account on December 31, 2022, assuming no additional TS investments. Round each amount to the nearest whole dollar.