On January 1, 2018, for $18 million, Monument Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
1. Prepare the journal entry to record interest on June 30, 2018, using the straight-line method.
2. Prepare the journal entry to record interest on December 31, 2018, using the straight-line method.

Question

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The Answer of On January 1, 2018, for $18 million, Monument Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
1. Prepare the journal entry to record interest on June 30, 2018, using the straight-line method.
2. Prepare the journal entry to record interest on December 31, 2018, using the straight-line method.

On January 1, 2018, for $18 Million, Monument Company Purchased