On July 1 of Year 1, West Company purchased for cash, 8, $10,000 bonds of North...

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On July 1 of Year 1, West Company purchased for cash, 8, $10,000 bonds of North 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 in three years on July 1. The bonds are classified as trading securities. West Company's annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. 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 a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Date Stated Interest Market Interest Discount Bond Amortization Amortized Cost Jul. 1, Year 1 $ 0 Jan. 1, Year 2 $ 0 $ 0 $ 0 0 Jul. 1, Year 2 0 0 0 0 Jan. 1, Year 3 0 0 0 0 Jul. 1, Year 3 0 0 0 0 Jan. 1, Year 4 0 0 0 0 Jul. 1, Year 4 0 0 0 0 b. Record the entry for the purchase of the bonds by West Company on July 1 of Year 1. Debit Credit 0 0 0 0 c. Record the adjusting entries by West Company on December 31 of Year to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on December 31 of Year 1 was $83,000. Date Jul. 1, Year 1 Account Name To record investment purchase. Date Account Name Dec. 31, Year 1 To accrue interest revenue. Dec. 31, Year 1 To record unrealized gain or loss. > > > Debit 0 Credit 0 0 0 0 0 0 0 0 0 d. Record the receipt of interest on January 1 of Year 2. Date Jan. 1, Year 2 Account Name To record the receipt of interest. Dr. Cr. 0 0 0 0 e. Record the sale of all of the bonds on January 2 of Year 2 for $83,050. Date Jan. 2, Year 2 Account Name To record the sale of investments. Dr. Cr. 0 0 0 0 0 0 f. Record the adjustment to the Fair Value Adjustment account on December 31 of Year 2, assuming no additional TS investments. Date Dec. 31, Year 2 Account Name To adjust FVA account. Dr. Cr. 0 0 0 0 On July 1 of Year 1, West Company purchased for cash, 8, $10,000 bonds of North 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 in three years on July 1. The bonds are classified as trading securities. West Company's annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. 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 a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Date Stated Interest Market Interest Discount Bond Amortization Amortized Cost Jul. 1, Year 1 $ 0 Jan. 1, Year 2 $ 0 $ 0 $ 0 0 Jul. 1, Year 2 0 0 0 0 Jan. 1, Year 3 0 0 0 0 Jul. 1, Year 3 0 0 0 0 Jan. 1, Year 4 0 0 0 0 Jul. 1, Year 4 0 0 0 0 b. Record the entry for the purchase of the bonds by West Company on July 1 of Year 1. Debit Credit 0 0 0 0 c. Record the adjusting entries by West Company on December 31 of Year to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on December 31 of Year 1 was $83,000. Date Jul. 1, Year 1 Account Name To record investment purchase. Date Account Name Dec. 31, Year 1 To accrue interest revenue. Dec. 31, Year 1 To record unrealized gain or loss. > > > Debit 0 Credit 0 0 0 0 0 0 0 0 0 d. Record the receipt of interest on January 1 of Year 2. Date Jan. 1, Year 2 Account Name To record the receipt of interest. Dr. Cr. 0 0 0 0 e. Record the sale of all of the bonds on January 2 of Year 2 for $83,050. Date Jan. 2, Year 2 Account Name To record the sale of investments. Dr. Cr. 0 0 0 0 0 0 f. Record the adjustment to the Fair Value Adjustment account on December 31 of Year 2, assuming no additional TS investments. Date Dec. 31, Year 2 Account Name To adjust FVA account. Dr. Cr. 0 0 0 0