Exercise 17 4 On January 1, 2017, Stellar Company purchased 13 bonds, having a maturity value of $279,000, for $299,622 84 The bonds provide the bondholders with a 11 yield They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year Stellar Company uses the effective interest method to allocate unamortized discount or premium The bonds are classified as available for sale category The fair value of the bonds at December 31 of each year end is as follows 2017 $297,600 2020 $289,600 2018 $288,500 2021 $279,000 2019 $287,600 (a) Prepare the journal entry at the date of the bond purchase (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2017 (c) Prepare the journal entry to record the recognition of fair value for 2018 (Round 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 )

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Exercise 17-4 On January 1, 2017, Stellar Company purchased 13% bonds, having a maturity value of $279,000, for $299,622.84. The bonds provide the bondholders with

Exercise 17-4

On January 1, 2017, Stellar Company purchased 13% bonds, having a maturity value of $279,000, for $299,622.84. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Stellar Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.

2017	$297,600	2020	$289,600
2018	$288,500	2021	$279,000
2019	$287,600

(a)		Prepare the journal entry at the date of the bond purchase.
(b)		Prepare the journal entries to record the interest revenue and recognition of fair value for 2017.
(c)		Prepare the journal entry to record the recognition of fair value for 2018.

(Round 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.)