On July 1 of Year 1, West Company purchased for cash, 14, $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. West Company's annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium.

a. Prepare a bond amortization schedule for Year 1 and Year 2 using the effective interest method.

b. Record the entry for the purchase of the bonds by West Company on July 1 of Year 1.

c. Record the adjusting entry by West Company on December 31 of Year 1. The fair value of the bonds at December 31 of Year 1 was $141,750.

d. Indicate the effects of this investment on the Year 1 income statement and year-end balance sheet.

e. Record the receipt of interest on January 1 of Year 2.

f. After the interest was received on July 1 of Year 2, two of the bonds were sold for $18,335 cash. Provide the required entries on July 1 of Year 2 for the receipt of interest and the sale of the two bonds.