Exercise 17-3 (Part Level Submission)

On January 1, 2017, Blue Company purchased8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a6% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Blue Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

(a)

Prepare the journal entry at the date of the bond purchase.(Enter answers to 2 decimal places, e.g. 2,525.25.Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit

Jan. 1, 2017 _________________ _________ ________

___________ _________________ _________ ________