solve BE 17-2

KH Company purchased, as a held-to-maturity investment, $80,000 of the 9%,5-year bonds of Chester Corporation for $74,086, which provides an 11% return. Prepare KH s journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used (a) Debt Investments Cash. 74,086 (b) Cash (80,000 X.09) ..... 7,200 Debt Investments Interest Revenue (74,086X .11) 8,149 BE17-2 Use the information from BE171, but assume the bonds are purchased as held to collection and selling e security. Prepare Garfield's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. The bonds have a year-end fair value of $75,500 BRIEF EXERCISE 17-2