Problem 17-2 On January 1, 2017, Blue Company purchased $200,000,6% bonds of Aguirre Ca. for $275,665. The bonds were purchased to yield as interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Blue Company uses the effective interest method to amortize discount or premium. On January 1, 2019, Blue Company sold the bonds for $277,397 after receiving interest to meet its liquidity needs. 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.) Account Titles and Explanation Debit Credit Date Jan 1, 2017 SHOW LIST OF ACCOUNTS 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 Effect interest Method Bonds Purchased to Yield Interest Receivable Bond Interest Discount Cash Received Revenue Amortization Carrying Amount of Bonds Date 7/1/17 1/1/18 7/1/18 1/1/19 7/1/19 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 Total (c) (d) (e) Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017. If the fair value of Aguirre bonds is $279,397 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on January 1, 2017, is a debit of $3,698.) Prepare the journal entry to record the sale of the bonds on January 1, 2019. (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.) No Date Account Titles and Explanation Debit Credit (0 (1) July 1, 2017 (2) Dec 31, 2017 (d) Dec 31, 2018 le) Jan 1, 2019