On July 1 of the current year, West Company purchased for cash, 70, $10,000 bonds of North Corporation at a market rate of 4%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature in three years on July 1. 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. Note: When answering the following questions, round answers to the nearest whole dollar. Amortization Schedule. Journal Entries in Year 1 Journal Entries in Year 2 b. Record the entry for the purchase of the bonds by West Company on July 1. Date Account Name Jul. 1, Year 1 Investment in TS Cash Debit 700,000 Credit 0x 219,604 K To record investment purchase c. Record the adjusting entries by West Company on December 31 to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on that date was $726,250. Date Account Name Dec 31, Year testerest Receivable Investment in TS interest Revenue To accrue interest.revenue. Dec. 31, Year 1 Fair Value Adjustmere-APS Unrealized Gain or Loss income To record unrealized gain or loss Debit Credit 17.500 3,10 14,392 5,274 0 9.754