D: Problem Solving:

On January 1, 2013, Sainsbury Co. purchased as an investment $160,000, of ASDA Company bonds at a discount of $10,000. The bonds pay 6% interest for10-years. The market rate for similar bonds is 8%. The bonds pay interest semiannually on January 1 and July 1 of each year. Sainsbury Co accounts for the bonds as a held-to-maturity investment.

In Sainsbury Co December 31, 2013, journal entry what would Sainsbury Co record the first period of interest as credit to interest income

First period of interest income =

Record the required journal entry to for Sainsbury Co Ltd at the following dates:

Date Description Debit Credit 1/1/2013 30/06/2013 31/12/2013