Prepare the journal entry to record the interest received

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On January 1, 2013, Hi and Lois Company purchased 13% bonds having a maturity value of $346,400, for $372,004.85. The bonds provide the bondholders with a 11.00% yield. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable December 31 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

(a) Prepare the journal entry at the date of the bond purchase

(b) Prepare a bond amortization schedule

c) Prepare the journal entry to record the interest received and the amortization for 2013

(d) Prepare the journal entry to record the interest received and the amortization for 2014.

Reference no: EM131217512

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