Question - On May 1, 2014, Kirmer Corporation purchased $909,000 of 10% bonds, interest payable on January 1 and July 1, for $850,300 plus accrued interest. The bonds mature on January 1, 2020. Amortization is recorded when interest is received by the straight-line method. (Assume bonds are available for sale.)
1. Prepare the journal entry for May 1, 2014.
2. The bonds are sold on August 1, 2015 for $840,300 plus accrued interest. Prepare all entries required to properly record the sale.