Prepare the journal entry to record the interest revenue

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Problem 1: On January 1, 2020, Ivanhoe Company purchased 10% bonds having a maturity value of $260,000, for $280,761.26. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Ivanhoe Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category

Question problem 1: Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Reference no: EM132467021

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