On January 1, 2023, Donut Panic Inc., a popular donut chain, acquired $1,000,000 in bonds that mature in 10 years. The bonds pay interest annually at 4% per annum on December 31. The market rate of interest was 5% for similar investments.

Required:

a. was this purchased at discount or premium?

b. Prepare the journal entry to record the purchase of the bond (initial measurement)

c. Prepare the journal entry to record the receipt of interest on December 31, 2023. (subsequent

measurement)

d. Prepare the journal entry to record the receipt of interest on December 31, 2024 (subsequent

measurement)