On January 1, 2020, Sarasota Company purchased 10% bonds having a maturity value of $220,000, for $237,567.22. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sarasota Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Collapse question part

(a)

Prepare the journal entry at the date of the bond purchase. (Enter answers to 2 decimal places, e.g. 2,525.25. 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 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1, 2020

enter an account title to record the transaction on January 1, 2020enter an account title to record the transaction on January 1, 2020

enter a debit amountenter a debit amount

enter a credit amountenter a credit amount

enter an account title to record the transaction on January 1, 2020enter an account title to record the transaction on January 1, 2020

enter a debit amountenter a debit amount

enter a credit amountenter a credit amount