On March 1, Dennis Company purchased $200,000, 10-year, 12% bonds for 98 plus accrued interest (revenue approach) and brokerage fees and classified them as held-to-maturity securities. Interest is paid semiannually on January 1 and July 1. Brokerage fees for this transaction were $700.
Journalize the purchase on March 1 (including accrued interest), the receipt of interest on July 1 (including straight-line amortization), and the adjusting entry for accrued interest and amortization on Dec 31.