Question 3 Not complete Mark 1.20 out of 4.00 F Flag question Adjust FVA at Year-End On July 1 of the current year, West Company purchased for cash, 8, 510,000 bonds of North Corporation to yield 10%. The bonds pay 9% 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 AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium Note: When answering the following questions, round each amount to the nearest whole dollar. Amortization Schedule Journal Entries and Financial Statement Presentation for Year 1 Journal Entries for Year 2 a. Prepare a bond amortization schedule for the current year and the following year using the effective interest method. Date Stated Interest Jul 1. Year 1 Jan. 1. Year 25 Jul. 1. Year 2 Market Discount Bond Interest Amortization Amortized Cost S 77.970 3.8985 298 78.268 3.913 313 78.582 3.600 5 3.600 Check Partially correct b. Record the entry for the purchase of the bonds by West Company on July 1. Date jul. 1. Year 1 Account Name Debit Credit 0.X 77.970 0 0 Cash To record purchase of bonds c. Record the adjusting entries by West Company on December 31 to accrue interest revenue and adjust the investment to fair value. The fair value of the bonds at December 31 was 581,000, Date Dec 31 Year 1 Account Name Debit Credit 0 OX 0 0X OX