On January 1, 2014, Roosevelt Company purchased 12% bonds, having a maturity value of

^{$500,000, for $537,907.40. The bonds p r ovide the bondholders with a 10% yield. They a r e dated January 1,}

^{2014, and matu r e January 1, 2019, with inte r est r eceivable December 31 of each yea r . Roosevelt’s business}

^{model is to hold these bonds to collect contractual cash flows.}

Instructions

(a) Prepare the journal entry at the date of the bond purchase.

^{(b) P r epa r e a bond amortization schedule.}

^{(c) P r epa r e the journal entry to r eco r d the inte r est r eceived and the amortization for 2014.}

^{(d) P r epa r e the journal entry to r eco r d the inte r est r eceived and the amortization for 2015.}