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On January 1, Sharp Company purchased $25,000 of Sox Company 5% bonds, at a time when the market rate was 6%. The bonds mature

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On January 1, Sharp Company purchased $25,000 of Sox Company 5% bonds, at a time when the market rate was 6%. The bonds mature on December 31 in five years, and pay interest semiannually on June 30 and December 31. Sharp plans to and has the ability to hold the bonds until maturity. Assume that Sharp uses the effective interest method to amortize any premium or discount on investments in bonds. At June 30, the bonds are quoted at 98. Note: When answering the following questions, round answers to the nearest whole dollar. a. Prepare the entry for the purchase of the debt investment on January 1. Date Account Name Jan. 1 Investment in HTM Securities Cash To record the purchase of investment. Debit Credit 0 0 0 0 b. Prepare the entry for the receipt of interest on June 30. Date June 30 Account Name To record the receipt of interest. Debit Credit 0 0 0 0 0 ooo

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