On January 1, 2020, Vaughn Company purchased $270,000, 6% bonds of Aguirre Co. for $248,099. 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. Vaughn Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Vaughn Company sold the bonds for $249,638 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 Debit 248099 Credit Cash 248099