On January 1, 2020, Sarasota Limited paid $559,423.70 for 12% bonds with a maturity value of $520,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Sarasota accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end.

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On January 1, 2020, Sarasota Limited paid $559,423.70 for 12% bonds with a maturity value of $520,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Sarasota accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end.

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Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Jan 1, 2020

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List of Accounts

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Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.)

Schedule of Interest Income and Bond Premium Amortization Effective Interest Method
Date	Cash Received		Interest Income		Premium Amortization		Carrying Amount of Bonds
01/01/20							$
12/31/20	$		$		$
12/31/21
12/31/22
12/31/23
12/31/24
	$		$		$

Prepare the journal entry to record interest received and interest income for 2020. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Dec 31, 2020

Prepare the journal entry to record interest received and interest income for 2021. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
Dec 31, 2021