Mel Company purchased $60,000 of Gibson Company's 20-year, 8 percent bonds at 98 on July 1, 2012. The bonds pay interest each January 1 and July 1, and they mature on July 1, 2029. Given this information, the entry to record the purchase of Gibson Company bonds would include a

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The bonds were purchased at 98, meaning 98% of the face value. Therefore, the debit to Held-to-Maturity Securities would be 98% of $60,000, which is $58,800.

Mel Company Purchased $60,000 of Gibson Company's 20-Year, 8 Percent