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Presented below is an amortization schedule related to Pronghorn Companys 5-year, $130,000 bond with a 7% interest rate and a 4% yield, purchased on December

Presented below is an amortization schedule related to Pronghorn Companys 5-year, $130,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2015, for $147,363.

Date

Cash Received

Interest Revenue

Bond Premium Amortization

Carrying Amount of Bonds

12/31/15 $147,363
12/31/16 $9,100 $5,895 $3,205 144,158
12/31/17 9,100 5,766 3,334 140,824
12/31/18 9,100 5,633 3,467 137,357
12/31/19 9,100 5,494 3,606 133,751
12/31/20 9,100 5,349 3,751 130,000

The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.

12/31/16

12/31/17

12/31/18

12/31/19

12/31/20

Amortized cost $144,158 $140,824 $137,357 $133,751 $130,000
Fair value $143,600 $142,800 $139,300 $134,800 $130,000

(a) Prepare the journal entry to record the purchase of these bonds on December 31, 2015, assuming the bonds are classified as held-to-maturity securities.
(b) Prepare the journal entry related to the held-to-maturity bonds for 2016.
(c) Prepare the journal entry related to the held-to-maturity bonds for 2018.
(d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale.
(e) Prepare the journal entries related to the available-for-sale bonds for 2016.
(f) Prepare the journal entries related to the available-for-sale bonds for 2018.

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