On January 1, 2017, Flounder Company purchased $300,000, 6% bonds of Aguirre Co. for $275,666. The bonds were purchased to yield 8% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Flounder Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Flounder Company sold the bonds for $277,397 after receiving interest to meet its liquidity needs.

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.)

Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017.

(d) If the fair value of Aguirre bonds is $279,397 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on January 1, 2017, is a debit of $3,698.)

(e) Prepare the journal entry to record the sale of the bonds on January 1, 2019.

manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts Date Account Titles and Explanation Debit Credit Jan. 1, 2017 Prepare the amortization schedule for the bonds. (Round answers to o decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective-Interest Method Bonds Purchased to Yield Interest Receivable Bond Or Interest Discount Cash Received Revenue Amortization Carrying Amount of Bonds Date 1/1/17 7/1/17 1/1/18 7/1/18 1/1/19 7/1/19 1/1/20 7/1/20 1/1/21 7/1/21 1/1/22 Total Account Titles and Explanation Debit Date 10 (1) July 1, 2017 (2) Dec 31, 2017 ) Dec 31, 2018 0 Jan 1, 2019