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On July 1 of Year 1. West Company purchased for cash, 22,$10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable
On July 1 of Year 1. West Company purchased for cash, 22,$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 oremium. 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. On July 1 of Year 1 , West Company purchased for cash, 22,$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. 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 $222,750. On July 1 of Year 1 , West Company purchased for cash, 22,$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. d. Indicate the effects of this investment on the Year 1 income statement and year-end balance sheet. On July 1 of Year 1. West Company purchased for cash, 22,$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. e. Record the receipt of interest on January 1 of Year 2. f. After the interest payment on July 1 of Year 2, two of the bonds were sold for $17,756 cash. Provide the required entries on July 1 of Year 2. On July 1 of Year 1. West Company purchased for cash, 22,$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 oremium. 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. On July 1 of Year 1 , West Company purchased for cash, 22,$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. 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 $222,750. On July 1 of Year 1 , West Company purchased for cash, 22,$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. d. Indicate the effects of this investment on the Year 1 income statement and year-end balance sheet. On July 1 of Year 1. West Company purchased for cash, 22,$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. e. Record the receipt of interest on January 1 of Year 2. f. After the interest payment on July 1 of Year 2, two of the bonds were sold for $17,756 cash. Provide the required entries on July 1 of Year 2
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