Question
Recording Entries for TS-Effective Interest Method Adjust FVA at Sale and Year-End On July 1, 2020. West Company purchased for cash, three $10,000 bonds
Recording Entries for TS-Effective Interest Method Adjust FVA at Sale and Year-End On July 1, 2020. West Company purchased for cash, three $10,000 bonds of North Corporation at a market rate of 4%. The bonds pay S% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. 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. Amortization Schedule Journal Entries in 2020 Journal Entries in 2021 a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Adjust market interest in the final year of the bond term for any net rounding difference. Market Interest Premium Bond Amortization Amortized Cost Date Jut 1,2020 Stated Interest Jan 1, 2021 S OMS 2001 OM ON 1,2022 OM OM OM OM 12022 OM Jam 1,2023 OM OM 1,2023 OM OM ON Tutal OMS OMS ON
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