Lance Brothers Enterprises acquired $770,000 of 5% bonds, dated July 1, on July 1, 2016, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Lance Brothers paid $690,000 for the investment in bonds and will receive interest semiannually on June 30 and December 31. Prepare the journal entries (a) to record Lance Brothers investment in the bonds on July 1, 2016, and (b) to record interest on December 31, 2016, at the effective (market) rate

Brief Exercise 12-1 Securities held-t o-maturity: bond investment, effective interest [LO12-1] Lance Brothers Enterprises acquired $770,000 of 5% bonds, dated July 1, on July 1, 2016, as a long-term investment Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Lance Brothers paid S690.000 for the investment in bonds and will receive interest semiannually on June 30 and December 31. Prepare the journal entries (a) to record Lance Brothers' investment in the bonds on July 1, 2016, and (b) to record interest on December 31, 2016, at the effective (market) rate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Event General Journal Debit Credit Investment in bonds 770,000 Discount on bond investment Cash 80,000 690,000 Cash Discount on bond investment 11,550 2.250x Interest revenue 13,800X eBook & Resources