Question - Pronghorn Corporation purchased, as a held-to-maturity investment, $55,000 of the 8%, 4-year bonds of Harrison, Inc. for $58,861, which provides a 6% return. The bonds pay interest semiannually.
Prepare Pronghorn's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used.