On January 1, 2020, Pharoah Company purchased $320,000, 6% bonds of Aguirre Co. for $294,044. The bonds were purchased to yield 8% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Pharoah Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Pharoah Company sold the bonds for $295,711 after receiving interest to meet its liquidity needs. (a) Your answer is correct. 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 O for the amounts.) Date Jan. 1, 2020 Account Titles and Explanation Debt Investments Cash Debit 294044 Credit 294044 Date 1/1/20 $ 7/1/20 1/1/21 7/1/21 1/1/22 7/1/22 1/1/23 7/1/23 Interest Receivable Or Cash Received Amortization-Effective-Interest Method Bonds Purchased to Yield Interest Revenue $ Bond Discount Amortization $ 1/1/24 7/1/24 1/1/25 Total $ $ $ $ 11 Carrying Amount c Bonds