On January 1, 2017, Pharoah Company purchased 8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Pharoah Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category

Prepare the journal entry at the date of the bond purchase.

Prepare a bond amortization schedule.

Prepare the journal entry to record the interest revenue and the amortization at December 31, 2017

Prepare the journal entry to record the interest revenue and the amortization at December 31, 2018.

On January 1, 2017, Swifty Company purchased 13% bonds, having a maturity value of $308,000, for $330,766.44. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Swifty Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.

2017		$328,700		2020		$317,300
2018		$316,400		2021		$308,000
2019		$315,400

(a)		Prepare the journal entry at the date of the bond purchase.
(b)		Prepare the journal entries to record the interest revenue and recognition of fair value for 2017.
(c)		Prepare the journal entry to record the recognition of fair value for 2018.