TB Problem 12-145 (Algo)

On March 1, 2021, Navy Corporation used excess cash to purchase U.S. Treasury bonds for $95,000 plus accrued interest. The bonds were purchased at face value. The appropriate interest rate is 6%. Interest on these bonds is payable on January 1 and July 1 of each year. Navys investment is accounted for as held-to-maturity. The fair value of the Treasury bonds is $96,000 at year-end. Required: Prepare the appropriate journal entries to record the transactions for the year, including any year-end adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

1) Record the purchase of U.S. Treasury bonds for cash and accrued interest

2) Record the cash received for interest revenue and receivable.

3) Record the entry for interest received.