Problem 1. On January 1, 2019, Coco Corp. purchased $450,000 of 6% bonds, interest payable on January and July 1, for $428,800 (a 7% effective interest rate). The bonds mature on January 1, 2025. Record amortization and interest revenue on the appropriate dates by the effective-interest method (round to the nearest dollar). (Assume bonds are non-trading.)
Instructions
(a) Prepare the entry for January 1, 2019.
(b) The bonds are sold on October 1, 2019 for $427,000 plus accrued interest. Prepare all e required to properly record the sale.