Problem 17-02 On January 1, 2020, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Novotna Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Novotna Company sold the bonds for $370,726 after receiving interest to meet its liquidity needs. Your answer is partially correct. Try again. Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Credit Jan 1, 2020 Dividend Receivable Debit 400000 Cash 30886 369114 SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is partially correct. Try again. Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective-Interest Method Bonds Purchased to Yield Interest Receivable Bond Interest Discount Date Cash Received Revenue Amortization 1/1/20 Or Carrying Amount of Bonds 0 0 369114 7/1/20 16000 18456 2456 371570 1/1/21 16000 18578 2578 374148 7/1/21 16000 18707 2707 376856 1/1/22 16000 18843 2843 379698 7/1/22 16000 18985 2985 382683 1/1/23 16000 19134 3134 385817 7/1/23 16000 19291 3291 389108 1/1/24 16000 19455 3455 392564 7/1/24 16000 19628 3455 396192 1/1/25 16000 19810 3808 400000 Total SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is partially correct. Try again. (c) Prepare the journal entries to record the semiannual interest on (1) July 1, 2020, and (2) December 31, 2020. (d) If the fair value of Aguirre bonds is $372,726 on December 31, 2021, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3,375.) (e) Prepare the journal entry to record the sale of the bonds on January 1, 2022. (Round answers to o decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit (c) (1) July 1, 2020 Cash No. 16000 Bonds Payable 2456 Interest Revenue 18456 (2) Dec 31, 2020 Interest Receivable Interest Revenue (d) Dec. 31, 2021 Fair Value Adjustment 1953 Unrealized Holding Gair 1953 (e) Jan 1, 2022 Cash Click if you would like to Show Work for this question: Open Show Work