On January 1, 2020, Ayayai Company purchased 9% bonds having a maturity value of $250,000, for $270,502.00. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Ayayai 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, 2020