On January $1,2024,$ Power Ltd$.$ issued bonds with a maturity value of $$4\mathrm{.}65$ million for $$4,461,422,$ when the market rate of interest was $8\%.$ The bonds have a contractual interest rate of $7\%$ and mature on January $1,2029.$ Interest on the bonds is payable semi$-$annually on July $1$ and January $1$ of each year. On January $1,2024,$ Finance Company, a public company, purchased Power Ltd$.$ bonds with a maturity value of $$0\mathrm{.}93$ million to earn interest. On December $31,2024,$ the bonds were trading at $97.$ Both companies$$ year end is December $31.$

Instructions

What amount did Finance Company pay for Power Ltd$.$s bonds?

Prepare the journal entry for Finance Company $($investor$)$ on January $1,2024.$

Prepare a bond amortization schedule for Finance Company for the first four interest periods.

Prepare the journal entries for Finance Company to record $(1)$ the receipt of interest on July $1,2024$; $(2)$ the accrual of interest on December $31,2024$; and $(3)$ the receipt of interest on January $1,2025.$

Show how the bonds and related income statement accounts would be presented in Finance Company$$s financial statements for the year ended December $31,2024.$

Prepare the journal entry for Power Ltd$.($investee$)$ on January $1,2024.$

Prepare the journal entries for Power Ltd$.$ to record $(1)$ the payment of interest on July $1,2024$; $(2)$ the accrual of interest expense on December $31,2024$; and $(3)$ the payment of interest on January $1,2025,$ assuming Power uses the effective$-$interest method to amortize any premium or discount.

Show how the bonds and related income statement accounts would be presented in Power Ltd$.$s financial statements for the year ended December $31,2024.$