Prepare the journal entry at the date of bond purchase

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Reference no: EM13145049

Entries for Held-to-Maturity Securities on January 1, 2009, Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2009, and mature January 1, 2014, with interest receivable December 31 of each year. Roosevelt Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

(a) Prepare the journal entry at the date of the bond purchase.

(b) Prepare a bond amortization schedule.

(d) Prepare the journal entry to record the interest received and the amortization for 2010.

Reference no: EM13145049

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