On July 1 of Year 1, West Company purchased for cash, 16 , $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% 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 held-to-maturity securities. The annual reporting period ends December 31. Assume the straight-line interest method of amortization of any discount or premium.

Amortization Schedule

Journal Entries in Year 1

Financial Statement Presentation

Journal Entries in Year 2

a. Prepare a bond amortization schedule for Year 1 and Year 2 using the straight-line interest method. Note: Round each amount entered into the schedule below to the nearest whole dollar.

	Date	Stated	Market	Discount	Bond
		Interest	Interest	Amortization	Amortized Cost
	Jul. 1, Year 1				Answer
	Jan. 1, Year 2	Answer	Answer	Answer	Answer
	Jul. 1, Year 2	Answer	Answer	Answer	Answer