On January 2, 2021 Albert Company issued 3 year, 7% bonds with a face value of $1,000,000. The bonds issued for $948,421 and pay interest semi-annually each June 30 and December 31. The effective rate of interest was 9%. Leroy Company purchased 20% of the bond issue and properly classified the investment as HTM.

Part 1: Leroy's journal entry for purchase of bonds

Date	Journal Entry	Debit	Credit
1/2/2021	Investment in Bonds	$200,000
	Cash		$189,684
	Discount on Bonds		$10,316
	(Purchase on bonds on discount)

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Part 2: Amortization Table

Date	Interest Payment	Interest Revenue	Amortized	Carrying Value
	3.50% x FV	4.50% x Carrying Value
	A	B	C = B - A	D = Carrying Value + C
1/2/2021				$189,684
6/30/2021	$7,000	$8,536	$1,536	$191,220
12/31/2021	$7,000	$8,605	$1,605	$192,825
6/30/2022	$7,000	$8,677	$1,677	$194,502
12/31/2022	$7,000	$8,753	$1,753	$196,255
6/30/2023	$7,000	$8,831	$1,831	$198,086
12/31/2023	$7,000	$8,914	$1,914	$200,000

Receipt of the 12/31/2021 interest payment (journal entry)

4. Amount of interest revenue reported for the year ended December 31, 2022

5. Receipt of the last interest payment on 12/31/2023 (journal entry)

6. Redemption of the bonds (journal entry)