On January 1, 2018, Kelly Corporation acquired bonds with a face value of $500,000 for $483,841.79, a price that yields a 10% effective annual interest rate, pay interest on June 30 and December 31, and are due December 31, 2021, and are being held to maturity.

Required:

Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the:

1.) straight line method of amortization

2.) effective interest method of amortization