On July 1, 2021, Metlock Inc., a public company, purchased $380,000 of Bridgeport Corp. 10-year, 6% bonds for $352,996 to earn interest. The bonds had a market interest rate of 7%. The bonds pay interest semi-annually on January 1 and July 1. Metlock Inc. has a December 31 year end. At December 31, 2021, the bonds are trading at 96.

Assuming Metlock Inc. purchased the bonds from Bridgeport Corp., record the journal entries required on July 1 for Metlock Inc., and Bridgeport Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Metlock (investor)

Date	Account Titles and Explanation	Debit	Credit
July 1	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(To record purchase of investment.)

Bridgeport (investee)

Date	Account Titles and Explanation	Debit	Credit
July 1	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(To record issuance of bonds payable.)

Record any adjusting journal entries that are required at December 31 for Metlock Inc., and Bridgeport Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Metlock (investor)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(To accrue interest revenue.)

Bridgeport (investee)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(To accrue interest expense.)

Record the receipt and payment of the first interest payment on January 1, 2022, for Metlock Inc., and Bridgeport Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Metlock (investor)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(Collection of interest receivable.)

Bridgeport (investee)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	Bonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInvestments at Amortized CostNo EntryInvestments at FVTPLInvestment in Associate
	(To record payment of interest.)

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