Reference no: EM132574509
On January 1, 2018, Final Company purchased $400,000, 8% bonds of Aguirre Company for $369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July1 and January 1. The bonds mature on January 1, 2023. Final Company plans to hold these bonds to collect contractual cash flows. On January 1, 2020, after receiving interest, Final Company sold the bonds for $370,276 to meet its liquidity needs.
Question 1. Prepare the journal entry to record the purchase of bonds.
Question 2. Prepare bond amortization schedule.
Question 3. Prepare the journal entries to record the semiannual interest on July 1, 2018 and December 31, 2018.
Question 4. Prepare the journal entry to record the sale of bonds on January 1, 2020.
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