Response to the following problem:
Potter Hospital purchased $75,000 of corporate bonds at face value and accrued interest on August 1, 20X1, with brokerage and other acquisition costs amounting to $88. These 6 percent bonds pay interest semiannually on June 1 and December 1, and mature on June 1, 20X5. The hospital intends to hold these bonds as a temporary investment of its unrestricted fund. On January 1, 20X2, the bonds are sold by the hospital at 98 percent and accrued interest, with brokerage fees and other expenses of sale amounting to $73. Potter Hospital closes its books annually on December 31.
Required: (1) Prepare, in general journal form, all necessary entries for 20X1 with respect to this investment.
(2) Indicate how all matters relating to this investment should be presented in the hospital's 20X1 financial statements.
(3) Prepare the necessary entry, in general journal form, to record the sale of the bonds on January 1, 20X2.