Question - Whispering Company purchased, on January 1, 2017, as a held-to-maturity investment, $78,000 of the 9%, 5-year bonds of Chester Corporation for $72,234, which provides an 11% return.
Prepare Whispering's journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used.