James Company purchased $800,000, 8 percent bonds issued by Heidi Company on January 1 of the current

Question:

James Company purchased $800,000, 8 percent bonds issued by Heidi Company on January 1 of the current year. The purchase price of the bonds was $900,000. Interest is payable semiannually each June 30 and December 31. Record the purchase of the bonds on January 1 of the current year.