On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $290,000. The Cortland bonds have a stated interest rate of 6%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: (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.):

January 1, 2021	7.0	%
June 30, 2021	8.0	%
December 31, 2021	9.0	%

Required: 1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less A View transaction list Journal entry worksheet Record the investment in bonds with a face value of $290,000, a stated interest rate of 6% and a market yield of 7%. The bonds pay interest semi- annually. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet 2 3 4 5 > Record the interest revenue. Note: Enter debits before credits. Date General Journal Debit Credit June 30, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the fair value adjustment when the market yield is 8%. Note: Enter debits before credits. General Journal Debit Credit Date June 30, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the interest revenue. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the fair value adjustment when the market yield is 9%. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet 1 2 3 4 5 > Record the investment in bonds with a face value of $290,000, a stated interest rate of 6% and a market yield of 7%. The bonds pay interest semi- annually. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the interest revenue. Note: Enter debits before credits. Date General Journal Debit Credit June 30, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the fair value adjustment when the market yield is 8%. Note: Enter debits before credits. Date General Journal Debit Credit June 30, 2021 Required 1 Req 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less View transaction list Journal entry worksheet Record the interest revenue. Note: Enter debits before credits. General Journal Debit Credit Date December 31, 2021 Required 1 Reg 1 General Journal Required 2 Required 3 Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number.) Show less A View transaction list Journal entry worksheet