On December 31, 2020, when the market interest rate is 6 percent, an investor purchases $700,000 of Solar Ltd. 10-year, 5 percent bonds at issuance for $647,929. Interest is paid semi-annually. Assume that the investor plans to hold the investment to maturity.

Required

1. Prepare a schedule for amortizing the discount on the bond investment through December 31, 2021. The investor uses the effective-interest amortization method. Use Try It! 6 on page 910 as a guide to create the schedule.

2. Journalize the purchase on December 31, 2020, the first semi-annual interest receipt on June 30, 2021, and the year-end interest receipt on December 31, 2021.