On September 30 , 2021 , Newtex Inc. purchased 5.0 % bonds of McPhee Corporation at 97 as a long - term , held - to - maturity investment . The maturity value of the bonds will be 46,000 on September 30 , 2026 The bonds pay interest on March 31 and September 30. Newtex's fiscal year end is December 31

1. What method should Newtex use to account for its investment in the McPhee Corp. bonds ?

2. Using the straight-line method of amortizing the discount on bonds, journalize all of Newtex's transactions on the bonds for 2021.

3. Show how Newtex would report everything related to the bond investment on its balance sheet at its year -end, December 31, 2021.

On September 30,2021 , Newtex, Inc, purchased 5.0% bonds of McPhee Corporation at 97 as a long-term, held-to-maturity investment. The maturity value of the bonds will be $46,000 on September 30, 2026. The bonds pay interest on March 31 and September 30. Newtex's fiscal year end is December 31 Read the tequirements: Requirement 1, What method should Newtex use to account for its imvestment in the McPhee Corp. bonds? Newtex should use the method to account for ins invostment in the McPhee Corp bonds Requirement 2. Using the straight line method of amortizing the discount on bonds, journalke all of Newtex's transactions on the bonds for 2021 . (Record debits first, then credits. Exchude explanations from any journal entries) Start by joumalizing the purchase of the bonds in McPhee on Septempor 30, 2021