Journal entry to record the purchase of the bonds

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Reference no: EM131215694

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $75 million on January 1, 2013 to Saxton-Bose Corporation. The bonds mature on December 31, 2021 (9 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Prepare the journal entry to record the purchase of the bonds by Saxton-Bose on January 1, 2013.

Prepare the journal entry to record interest revenue on June 30, 2013 (at the effective rate).

Reference no: EM131215694

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