On January 1, 2019, Rodgers Company purchased $100,000 face value, 9%, 3-year bonds for $97,462.11, a price that yields a 10% effective annual interest rate. The bonds pay interest semiannually on June 30 and December 31.

Required:

1.	Record the purchase of the bonds.
2.	Prepare an investment interest income and discount amortization schedule using the effective interest method.
3.	Record the receipts of interest on June 30, 2019, and June 30, 2021.

CHART OF ACCOUNTS

Rodgers Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
189	Accumulated Depreciation
191	Investment in Held-to-Maturity Debt Securities

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue
431	Interest Income
434	Gain on Sale of Investment

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
599	Loss on Sale of Investment
910	Income Tax Expense