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Question 2 Partially correct Mark 0.72 out of 4.00 P Rag question Adjust EVA at Year-End On July 1 of the current year, West Company

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Question 2 Partially correct Mark 0.72 out of 4.00 P Rag question Adjust EVA at Year-End On July 1 of the current year, West Company purchased for cash, 8, 510,000 bonds of North Corporation at a market rate of 49. 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. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. Note: When answering the following questions, round answers to the nearest whole dollar. Amortization Schedule Journal Entries in Year 1 Journal Entries in Year 2 a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Date Stated Interest Jul. 1. Year 1 Jan. 1. Year 2 5 Jul. 1. Year 2 Jan. 1. Year 3 Jul. 1. Year 3 Jan, 1. Year 4 Jul. 1. Year 4 2.000 5 2.000 2,000 2,000 2.000 2.000 Market Premium Bond Interest Amortization Amortized Cost $ 77,970 X 3.200 X 5 502 X 117,252 % 3.518 x 518 x 117.770 % 3.533 x 533 x 118.303 X 3.549 x 549 X 118,852 x 3,566 x 566 X 119.417 x 3,583 x 583 X 80.000 Check Partially correct Marks for this submission: 0.7274.00. On July 1 of the current year, West Company purchased for cash, 8, 510,000 bonds of North Corporation at a market rate of 49. The bonds pay 54 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. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore Income taxes. Note: When answering the following questions, round answers to the nearest whole dollar Amortization Schedule Journal Entries in Year 1 Journal Entries in Year 2 b. Record the entry for the purchase of the bonds by West Company on July 1 Account Name Debit Date jul. 1. Yeart Credit O OX 0 0.X To record investment purchase c. Record the adjusting entries by West Company on December 31 to accrue interest revenue and record the unrealized gain or loss. The fair value of the bonds on that date was $83,000, Account Name Debit Credit Date Dec 31, Year 1 OX OX OX 0 To accrue interest revenue Dec. 31. Year 1 0X 0 0 OX To record unrealizes sain or loss. Check Partially correct Marks for this submission: 0.72/4.00

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