1 9 points Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2021, interest revenue on June 30, 2021 and interest revenue on December 31, 2028. (Round final answers to the nearest whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Date General Journal Debit Credit 1 January 01, 2021 Investment in bonds 129,351,000 Cash 129,351,000 2 June 30, 2021 Cash Investment in bonds Interest revenue 7,500,000 276,724 x 7,761,060 3 December 31, 20 Cash 7,500,000 Investment in bonds 556,822 X Interest revenue 8,056,822 7 2 points On February 1, 2021, Cromley Motor Products issued 12% bonds, dated February 1, with a face amount of $65 million. The bonds mature on January 31, 2025 (4 years). The market yield for bonds of similar risk and maturity was 14%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $65,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that indicate Cromley's effective interest expense for each interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023. > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare amortization schedules that indicate Cromley's effective interest expense for each interest period during the term to maturity. (Do not round intermediate calculations. Enter your answers in whole dollars.) Payment Number Cash Payment Effective Interest Increase in Balance Outstanding Balance $ 61,118,070 1 $ 3,900,000 $ 4,278,265 $ 2 3,900,000 4,304,743 378,265 404,743 61,496,335 61,901,078 3 3,900,000 4,333,075 433,075 62,334,153 4 3,900,000 4,363,391 463,391 62,797,544 5 3,900,000 4,395,828 495,828 63,293,372 6 3,900,000 4,430,536 530,536 63,823,908 7 3,900,000 4,467,674 567,674 64,391,582 8 3,900,000 4,508,418 608,418 X 65,000,000 Totals $ 31,200,000 $ 35,081,930 $ 3,881,930 < Req 1 Req 2B > Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. (Do not round intermediate calculations. Enter your answers in whole dollars.) Payment Number Cash Payment Effective Interest Increase in Balance Outstanding Balance $ 61,118,070 1 $ 3,900,000 $ 4,278,265 $ 378,265 61,496,335 x 2 3,900,000 4,304,743 404,743 61,901,078 3 3,900,000 4,333,075 433,075 62,334,153 4 3,900,000 4,363,391 463,391 62,797,544 5 3,900,000 4,395,828 495,828 63,293,372 6 3,900,000 4,430,536 530,536 63,823,908 7 3,900,000 4,467,674 567,674 64,391,582 8 3,900,000 4,508,418 x 608,418 65,000,000 x $ Totals $35,081,930 $ 3,881,930 31,200,000 < Rea 2A Rea 3 > Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's investment on February 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) General Journal No Date 1 February 01, 2021 Cash Discount on bonds payable Bonds payable 2 February 01, 2021 Investment in bonds Cash < Rea 2B Reg 4 Cromlev > Debit 61,118,070 Credit 3,881,930x 65,000,000 61,118,070 61,118,070 Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Cromley to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) No Date General Journal 1 July 31, 2021 Interest expense Cash Discount on bonds payable Debit 4,278,265 Credit 3,900,000 378,265 2 December 31, 202 Interest expense 3,587,286 Interest expense Discount on bonds payable 3,250,000 337,286 3 January 31, 2022 Interest expense Interest expense Cash Discount on bonds payable 3,250,000 717,457 3,900,000 67,457 4 July 31, 2022 Interest expense Cash Discount on bonds payable 4,333,075 3,900,000 433,075 5 December 31, 202 Interest expense 3,636,159 Interest expense Discount on bonds payable 3,250,000 386,159 6 January 31, 2023 Interest expense Interest expense Cash 3,250,000 727,232 Discount on bonds payable 3,900,000 77,232 < Req 3 Req 4 Barnwell > Req 1 Req 2A Req 2B Req 3 Req 4 Cromley Req 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) No Date 1 July 31, 2021 Cash Investment in bonds Interest revenue General Journal Debit 3,900,000 Credit 378,265 4,278,265 X 2 December 31, 202 Interest receivable 3,250,000 Investment in bonds 337,286 x Interest revenue 3,587,286 3 January 31, 2022 Cash Investment in bonds Interest revenue Interest receivable 3,900,000 67,457 717,457 3,250,000 4 July 31, 2022 Cash 3,900,000 Investment in bonds 433,075 x Interest revenue 433,075x 5 December 31, 202 Interest receivable Investment in bonds Interest revenue 6 January 31, 2023 Cash Investment in bonds Interest revenue Interest receivable 3,250,000 x 386,159 3,636,159 X 3,900,000 77,232 X 727,232 3,250,000 < Rea 4 Cromlev Reg 4 Barnwell >