Purchase, Discount Amortization, and Sale of Bond Investment On November 1, 2012, Reid Corporation acquired bonds with a face value of $700,000 for $673,618.61. The bonds carry a stated rate of interest of 10%, were purchased to yield 11%, pay interest semiannually on April 30 and October 31, were purchased to be held to maturity, and are due October 31, 2017. On November 1, 2013, in contemplation of a major acquisition, the bonds were sold for $700,000. Reid is on a fiscal year accounting period ending October 31 and uses the effective interest method.

Prepare journal entries to record the purchase of the bonds, the interest receipts on April 30, 2013, and October 31, 2013, and the sale of the bonds. If required, round your answers to the nearest cent. For compound entries, if an amount box does not require an entry, leave it blank.

2012 Nov. 1 Investment in Held-to-Maturity Debt Securities

Cash

2013Apr. 30 Cash

Investment in held- to- Maturity Debt Securities

Interest Income

Oct. 31 Cash

Investment in held-to-Matueity Debt Securities

Interest Income

Nov. 1 Cash

Investment in Held-to-Maturity Debt Securities

Gain on sale of Deft Securities