Entries for HTM Debt Securities: Effective Interest Method

On July $1$ of Year $1,$ West Company purchased for cash, fourteen, $\backslash (\backslash$$ $10,000\backslash )$ bonds of North Corporation to yield $10\backslash \%.$ The bonds pay $\backslash (9\backslash \%\backslash )$ 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 held$-$to$-$maturity securities$.$ West Company's 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 answers to the nearest whole dollar.

Amortization Schedule

b$.$ Record the entry for the purchase of the bonds by West Company on July $1$ of Year $1.$

c$.$ Record the adjusting entry by West Company on December $31$ of Year $1.$ The fair value of the bonds at December $31$ of Year $1$ was $\backslash (\backslash$$ $141,750\backslash ).$ Entries for HTM Debt Securities: Effective Interest Method

On July $1$ of Year $1,$ West Company purchased for cash, fourteen, $\backslash (\backslash$$ $10,000\backslash )$ bonds of North Corporation to yield $10\backslash \%.$ The bonds pay $\backslash (9\backslash \%\backslash )$ 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 held$-$to$-$maturity securities$.$ West Company's 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 answers to the nearest whole dollar.

Amortization Schedule

Journal Entries in Year $1$

Journal Entries in Year $2$

d$.$ Indicate the effects of this investment on the Year $1$ income statement and year$-$end balance sheet. Entries for HTM Debt Securities: Effective Interest Method

On July $1$ of Year $1,$ West Company purchased for cash, fourteen, $\backslash (\backslash$$ $10,000\backslash )$ bonds of North Corporation to yield $10\backslash \%.$ The bonds pay $\backslash (9\backslash \%\backslash )$ 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 held$-$to$-$maturity securities$.$ West Company's 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 answers to the nearest whole dollar.

e$.$ Record the receipt of interest on January $1$ of Year $2.$

f$.$ After the interest was received on July $1$ of Year $2,$ two of the bonds were sold for $\backslash (\backslash$$ $18,335\backslash )$ cash. Provide the required entries on July $1$ of Year $2$ for the receipt of interest and the sale of the two bonds.