On January $1,2020,$ Cullumber Company purchased $$490,000,10\%$ bonds of Aguirre Co$.$ for $$453,933.$ The bonds were purchased to

yield $12\%$ interest. Interest is payable semiannually on July $1$ and January $1.$ The bonds mature on January $1,2025.$ Cullumber

Company uses the effective$-$interest method to amortize discount or premium. On January $1,2022,$ Cullumber Company sold the

bonds for $$455,456$ after receiving interest to meet its liquidity needs.

$($a$)$

Prepare the journal entry to record the purchase of bonds on January $1.$ Assume that the bonds are classified as available$-$for$-$sale.

$($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.$)$

Date

Account Titles and Explanation

Jan. $1,$

$2020$

Debit

Credit