Savers Mart Inc. is a general merchandise retail company that began operations on January 1, 2015. Savers Mart Inc. uses the effective interest method of amortizing discounts and premiums. The following transactions relate to held-to-maturity invest- ments acquired by Savers Mart Inc., which has a fiscal year ending on December 31:
2015
May 1. Purchased $80,000 of Northridge City 4.5%, 10-year bonds at 107.5 plus accrued interest. The bonds pay interest semiannually on March 1 and September 1. The market interest rate was 3.6%.
Jun. 16. Purchased $38,000 of Hancock Co. 6%, 12-year bonds at 97.1 plus accrued interest. The bonds pay interest semiannually on June 1 and December 1. The market interest rate was 6.3%.
Sep. 1.Received semiannual interest on the Northridge City bonds.
Oct. 1.Sold $24,000 of Northridge City bonds at 102 plus accrued interest.
Dec. 1. Received semiannual interest on the Hancock Co. bonds.
31. Accrued interest on the Northridge City bonds.
31. Accrued interest on the Hancock Co. bonds.
2016
Mar. 1. Received semiannual interest on the Northridge City bonds.
Jun. 1. Received semiannual interest on the Hancock Co. bonds.
Instruction
Journalize the entries to record these transactions.