Insurance companies and pension plans hold large quantities of bond investments. Sea Insurance Corp. purchased $2,400,000 of 4.0% bonds of Sheehan, Inc., for 110 on January 1, 2010. These bonds pay interest on January 1 and July 1 each year. They mature on January 1, 2014. At October 31, 2010, the market price of the bonds is 108.

Requirements
1. Journalize Seas purchase of the bonds as a long-term investment on January 1, 2010 (to be held to maturity), receipt of cash interest, and amortization of the bond investment at July 1, 2010. The straight-line method is appropriate for amortizing the bond investment.
2. Show all financial statement effects of this long-term bond investment on Sea Insurance Corp.’s balance sheet and income statement at October 31, 2010.