Accounting Homework Help
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Held-to-Maturity Securities) On January 1, 2015, Hi and Lois Company purchased 12% bonds, having a maturity value of $500,000, for $538,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2015, and mature January 1, 2020, 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.
Instructions
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare a bond amortization schedule.
(c) (d) Prepare the journal entry to record the interest received and the amortization for 2015 & 2016
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