On January 1, 2021, for $17.0 million, Cenotaph Company purchased 8% bonds, dated January 1, 2021, with a face amount of $19.0 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.

Required: 1. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.

Record the entry to interest on June 30, 2021, using the effective interest method.

general Journal	debit	credit
cash
discount on bond investment
interest revenue

Record the entry to interest on December 31, 2021, using the effective interest method.

general Journal	debit	credit
cash
discount on bond investment
interest revenue