(Learning Objective 4: Recording bond investment transactions) Assume that on September 30, 20X0, Baytex, Inc., paid 96 for 7.5% bonds of Collins Corporation as a long-term held-to-maturity investment. The maturity value of the bonds will be €40,000 on September 30, 20X5. The bonds pay interest on March 31 and September 30.

❙ Requirements 1. What method should Baytex use to account for its investment in the Collins bonds?

2. Using the straight-line method of amortizing the bonds, journalize all of Baytex’s transactions on the bonds for 20X0.

3. Show how Baytex would report everything related to the bond investment on its balance sheet at December 31, 20X0.