On July 1 of Year 1. West Company purchased for cash, 26,$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. 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. a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. On July 1 of Year 1 , West Company purchased for cash, 26,$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. 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. b. Record the entry for the purchase of the bonds by West Company on July 1 of Year 1. c. Record the adjusting entries by West Company on December 31 of Year 1 to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on December 31 of Year 1 was $269,750. On July 1 of Year 1, West Company purchased for cash, 26,$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. 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. d. Record the receipt of interest on January 1 of Year 2. e. Record the sale of all of the bonds on January 2 of Year 2 for $269,912.5, eliminating the related Fair Value Adjustment account balance. Prior to recording the sale, adjust the investment to fair value. On July 1 of Year 1. West Company purchased for cash, 26,$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. 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. a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. On July 1 of Year 1 , West Company purchased for cash, 26,$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. 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. b. Record the entry for the purchase of the bonds by West Company on July 1 of Year 1. c. Record the adjusting entries by West Company on December 31 of Year 1 to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on December 31 of Year 1 was $269,750. On July 1 of Year 1, West Company purchased for cash, 26,$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. 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. d. Record the receipt of interest on January 1 of Year 2. e. Record the sale of all of the bonds on January 2 of Year 2 for $269,912.5, eliminating the related Fair Value Adjustment account balance. Prior to recording the sale, adjust the investment to fair value
