On July 1 of Year 1 West Company purchased for cash 20 10

Last updated: 10/13/2023

On July 1 of Year 1 West Company purchased for cash 20 10 000 bonds of North Corporation at a market rate of 6 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 West Company s annual reporting period ends December 31 Assume the effective interest method of amortization of any discounts or premiums 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 11 Jan 1 Year 2 194 582 81 x S Jul 1 Year 2 Jan 1 Year 3 Jul 1 Year 3 0x 0x ox Market Discount Bond Interest Amortization Amortized Cost ox 0x1 0x 0x ox 000 0x Ooo 0x