On July 1, 2024, Imperial Inc., a public company, purchased $500,000 of Acme Corp. 10-year, 4% bonds for $461,000 to earn interest. The bonds had a market interest rate of 5%. The bonds pay interest semi-annually on January 1 and July 1. Imperial Inc. has a December 31 year end. At December 31, 2024, the bonds are trading at 96. 

Instructions 

a. Assuming Imperial Inc. purchased the bonds from Acme Corp., record the journal entries required on July 1 for 

(1) Imperial Inc.

(2) Acme Corp. 

b. Record any adjusting journal entries that are required at December 31 for 

(1) Imperial Inc. 

(2) Acme Corp. 

c. Record the receipt and payment of the first interest payment on January 1, 2025, for 

(1) Imperial Inc.

(2) Acme Corp.