Recording Entries for HTM Debt Securities— Effective Interest MethodOn July 1, 2020, West Company purchased for cash, sixteen $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. e. Record the receipt of interest on January 1, 2021.f. After the interest payment on July 1, 2021, two of the bonds were sold for $38,600 cash. Provide the required entries on July 1, 2021.Note: List multiple debits or credits (when applicable) in alphabetical order.Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). **Recording Entries for HTM Debt Securities— Effective Interest Method**On July 1, 2020, West Company purchased for cash, sixteen $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium.**Tabs:**- Amortization Schedule- Journal Entries in 2020- Financial Statement Presentation- Journal Entries in 2021**e. Record the receipt of interest on January 1, 2021.****f. After the interest payment on July 1, 2021, two of the bonds were sold for $38,600 cash. Provide the required entries on July 1, 2021.***Note: List multiple debits or credits (when applicable) in alphabetical order.**Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).*| Date | Account Name | Dr. | Cr. ||---------------|-----------------------|-------|-------|| e. Jan. 1, 2021 | ➔ | | || f. Jul. 1, 2021 | ➔ | | || | ➔ | | || | To record receipt of interest. | | || Jul. 1, 2021 | ➔ | | || | ➔ | | || | To record sale of bonds. | | | **Financial Accounting Terms**1. **Cash** An asset representing physical currency or funds available in bank accounts.2. **Interest Receivable** The interest income that has been earned but not yet received, representing amounts owed by debtors.3. **Investment in TS** Investment in trading securities; financial instruments held for short-term profit.4. **Fair Value Adjustment—TS** Adjustments made to bring trading securities to their current market value.5. **Investment in AFS Securities** Investments classified as available-for-sale securities; these are not classified as trading or held-to-maturity.6. **Fair Value Adjustment—AFS** Adjustments for available-for-sale securities to reflect market value changes.7. **Investment in HTM Securities** Investments in held-to-maturity securities, typically bonds that an entity intends to hold until maturity.8. **Investment in Stock** Ownership in shares of a company, which can be classified based on the purpose of investment.9. **Fair Value Adjustment—Equity Securities** Adjustments on the valuation of equity securities to reflect their fair market value.10. **Fair Value Adjustment—Fair Value Option** Optional adjustments taken to record certain financial instruments at their fair value.11. **Allowance for Credit Losses** A reserve set aside for estimated debts that may not be collected.12. **Accumulated Other Comprehensive Income** A section of equity that includes unrealized gains and losses not included in net income.13. **Unrealized Gain or Loss—OCI** Gains or losses that have occurred on paper, but the transaction has not been completed yet, affecting other comprehensive income.14. **Unrealized Gain or Loss—Income** Gains or losses that affect the income statement but have not yet been realized in cash.15. **Dividend Revenue** Revenue received from owning shares in a company, typically a portion of the company's earnings distributed to shareholders.16. **Interest Revenue** Income earned from lending money or allowing another entity to use capital.17. **Investment Income** Income generated from investments, including dividends and interest.18. **Loss on Impairment** Recognition of a decrease in the recoverable amount of an asset, which is less than its carrying amount.19. **Recovery of Loss on Impairment** Reevaluation of

Journal entries refers to the systematic documentation of the financial transactions of a company in its accounting books for a particular period of time.The journal entries are as follows: No Date Particulars Debit Credit e) January 1, 2021 Cash Accrued Interest (To record receipt of the interest on bonds) $3,600 $3,600 f) July 1, 2021 Cash Amortization of Discount on Purchase of Bonds Interest revenue ( To record receipt of the interest on bonds) $3,600 $313 $3,913 July 1, 2021 Cash Loss on sale of Bond Investment in Bond of North Corporation (To record the sale of 2 Bonds) $19,300 $596 $19,896