Lance Brothers Enterprises acquired $785,000 of 3% bonds, dated July 1, on July 1, 2013, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Lance Brothers paid $705,000 for the investment in bonds and will receive interest semiannually on June 30 and December 31.