On January 1, 2018, Morissette Inc. purchased $900,000 of 6-year, 2% bonds for $850,916 to yield a

Question:

On January 1, 2018, Morissette Inc. purchased $900,000 of 6-year, 2% bonds for $850,916 to yield a market interest rate of 3%. Interest is received semi-annually on July 1 and January 1. Morissette's year end is October 31. Morissette intends to hold the bonds until January 1, 2024, the date the bonds mature. The bonds' fair value on October 31, 2018, was $860,000.
Instructions
(a) Record the purchase of the bonds on January 1, 2018.
(b) Prepare a bond amortization schedule for the term of the bonds. Round all amounts on the table to the nearest dollar.
(c) Prepare the entry to record the receipt of interest on July 1, 2018.
(d) Prepare any adjusting entries required at October 31, 2018.
(e) Show the financial statement presentation of the bonds at October 31, 2018.
(f) Prepare the entry to record the of the bonds on January 1, 2024.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...