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Problem 1 On Jan. 1 Paul Co. purchased $800,000 of 5% bonds for $790,000. These bonds are classified as held to maturity. Interest is paid

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Problem 1 On Jan. 1 Paul Co. purchased $800,000 of 5% bonds for $790,000. These bonds are classified as held to maturity. Interest is paid semi-annually. For bonds of similar risk the market yield ( effective rate ) was 6%. Required: 1. Prepare the journal entry to record Paul's investment. 2. Prepare the journal entry to record interest on June 30 3. Prepare the journal entry to record interest on Dec. 31

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