On March 31, 2019, Brodie Corporation acquired bonds with a par value of $600,000 for $628,800. The bonds are due December 31, 2024, carry a 10% annual interest rate, pay interest on June 30 and December 31, and are being held to maturity. The accrued interest is included in the acquisition price of the bonds. Brodie uses straight-line amortization. Required: 1. Prepare journal entries for Brodie to record the purchase of the bonds and the first two interest receipts. 2. Next Level If Brodie failed to separately record the interest at acquisition, explain the errors that would occur in the companys financial statements (no calculations are required).

1. Prepare journal entries for Brodie to record the purchase of the bonds on March 31 and the first two interest receipts on June 30 and December 31.

General Journal Instructions

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GENERAL JOURNAL

Score: 99/112

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1	march 31	Investment in held-to-maturity debt securities		613,800
2		Interest income		15000
3		cash			628,800
4	June 30	Cash		30,000
5		Investment in held-to-maturity debt securities		?
6		Interest income			?
7	Dec 31	Cash		30000
8		Investment in held-to-maturity debt securities		?
9		Interest Income			?

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