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Held-to-maturity Investment On October 1, year 1, Xit Company purchased a $100,000,5% bond at par value. The bond is dated October 1 , year 1
Held-to-maturity Investment On October 1, year 1, Xit Company purchased a $100,000,5% bond at par value. The bond is dated October 1 , year 1 and will mature October 1 , year 6 . Interest payments are annual and are paid each subsequent October 1 . The bond is accounted for as a held-to-maturity investment. But, the company sells the bond for $104,000 after receiving the first interest payment. Requirements: Make journal entries to 1. Record the purchase of the bond on October 1, year 1. 2. Record the accrual of interest on December 31, year 1. 3. Record the receipt of interest on October 1 , year 2. 4. Record the sale of the bond on October 1 , year 2
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