Problem 17-02 (Part Level Submission) On January 1, 2020, Windsor Company purchased $370,000, 8% bonds of Aguirre Co. for $341,429. 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. Windsor Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Windsor Company sold the bonds for $343,034 after receiving interest to meet its liquidity needs. (a) Your answer is correct. 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 Debt Investments 341429 Cash 341429 Schedule of Interest Revenue and Bond Discount Amortization-Effective-Interest Method Bonds Purchased to Yield Bond Interest Discount Revenue Amortization Interest Receivable Or Cash Received Carrying Amount of Bonds Date 1/1/20 341429 7/1/20 14800 17071 2271 343700 1/1/21 14800 17185 2385 346085 7/1/21 14800 17304 2504 348590 1/1/22 14800 17429 2629 351219 7/1/22 14800 17561 2761 353980 1/1/23 14800 17699 2899 356879 7/1/23 14800 17844 3044 359923 1/1/24 14800 17996 3196 363119 7/1/24 14800 18156 3356 366475 1/1/25 14800 18324 3524 369999 Total 148000 176570 28570 (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 $345,034 on December 31, 2021, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3,257.) (e) Prepare the journal entry to record the sale of the bonds on January 1, 2022. (Round answers to 0 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.) No. Date Account Titles and Explanation Debit Credit (c) (1) July 1, 2020 (2) Dec. 31, 2020 v (d) Dec. 31, 2021 (e) Jan. 1, 2022