maturity investment because Baker has the intent and the ability to hold the bonds for 10 years. The effective rate on the bonds is 4.5%. Journal Entries and Balance Sheet Presentation a. Were the bonds purchased at a discount or premium? b. Prepare a bond amortization schedule for Year 1 and Year 2 using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Journal Entries and Balance Sheet Presentation c. Prepare the journal entry for the purchase of the investment on January 1 of Year 1. d. Prepare the journal entries to record interest received on December 31 of Year 1 and December 31 of Year 2. e. Indicate the carrying value of the Chocolate bonds on Baker's December 31 of Year 2 balance sheet assuming that the fair value of the bonds on December 31 of Year 2 was $20,800