On July 1, 2017, Moon Corporation, a private company, purchased $400,000 of six-year, 6% Star Corporation bonds

Question:

On July 1, 2017, Moon a private company, purchased $400,000 of six-year, 6% Star bonds for $420,000. The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase was 5%. The company uses the effective-interest method to amortize any premium or discount on debt security investments. Prepare the required journal entries on July 1 and December 31, 2017, and June 30, 2018.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...