On May 1, 2018, Kirmer Corp. purchased $450,000 of 12% bondswith interest payable on January 1 and July 1for $422,800 plus accrued interest. The bonds mature on January 1, 2024. (Hint: 68 months from date of purchase).

Amortization is recorded when interest is received by the straight-line method (by months and rounded to the nearest dollar). (Assume bonds are available for sale.) Instructions: (a) Prepare the Journal entry for May 1, 2018 to record this Investment.

(b) Prepare the Journal Entries to record the receipt of Interest for the July 1, 2018 and Amortization

(c) Prepare the appropriate Journal Entry on December 31, 2018 relating to the recognition of Interest Revenue.

(d) Prepare the appropriate Journal Entry on December 31, 2018 to apply the Fair Value Reporting requirement. The Fair Market Value of this Bond is $430,00 as of December 31, 2018