Purchase of Bonds as Investment: Ace Company purchased $400,000 of 8 percent bonds of Star Corporation on January 1, 2011, at a discount, paying $359,118. The bonds mature January 1, 2016 and yield 10% interest payable each July 1 and January 1.

A) Record the Journal entry on Aces books for purchase of the bonds:

B) Record the receipt by Ace of the first semi-annual interest payment (note: you must calculate the amount of the bond discount amortization pertaining to the first semi-annual payment)

C Assume that Ace Company sells its investment in Star bonds on November 1, 2015, at 99 plus accrued interest. Record the journal entry to accrue the interest revenue and discount amortization (4 months). Assume that the bond discount amortization at December 31 would have been $3,035. (Also, refer to the table attached)

Amortization schedule for Problems C

Date	Cash received	Interest revenue	Bond Discount Amortization	Carrying Amount of Bonds
	$0	$0	$0	$359,118
7/1/2011	$16,000	$17,956	$1,956	$361,074
12/31/2011	$16,000	$18,054	$2,054	$363,128
7/1/2012	$16,000	$18,156	$2,156	$365,284
12/31/2012	$16,000	$18,264	$2,264	$367,548
7/1/2013	$16,000	$18,377	$2,377	$369,926
12/31/2013	$16,000	$18,496	$2,496	$372,422
7/1/2014	$16,000	$18,621	$2,621	$375,043
12/31/2014	$16,000	$18,752	$2,752	$377,795
7/1/2015	$16,000	$18,890	$2,890	$380,685
12/31/2015	$16,000	$19,034	$3,035	$383,721
	$160,000	$184,601	$24,602