On January 1, 2019, Morgan Company acquires $300,000 of Nicklaus, Inc., 9% bonds at a price of $278,384. The interest is payable each December 31, and the bonds mature December 31, 2021. The investment will provide Morgan Company a 12% yield. The bonds are classified as held-for-collection.
Instructions
a. Prepare a 3-year schedule of interest revenue and bond discount amortization. (Round to nearest cent.)
b. Prepare the journal entry for the interest receipt of December 31, 2020, and the discount amortization.