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On January 1, 2017, Grouper Company purchased $300,000, 6% bonds of Aguirre Co. for $275, 666. The bonds were purchased to yield 8% interest. Interest
On January 1, 2017, Grouper 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 l. The bonds mature on January 1, 2022. Grouper Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Grouper Company sold the bonds for S277.397 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 amortization schedule for the bonds. (Hound answers to 0 decimal places, e.g. 1, 250.)
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