On January 1,2014,Winston Company purchased 6% bonds with a face value of $50,000 for par.Winston Company intends to hold the bonds until maturity.Interest is payable semiannually on July 1 and January 1.The company's fiscal year ends on December 31.The journal entry on July 1,2014 is:

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Since the interest is payable semiannually, on July 1, the company will receive half of the annual interest payment. The bonds have a face value of $50,000 and a coupon rate of 6%, meaning the annual interest payment is $3,000 (i.e., 0.06 x $50,000). Therefore, the journal entry on July 1 is to debit Cash for $1,500 (i.e., $3,000/2) and credit Interest Revenue for $1,500.

On January 1,2014,Winston Company Purchased 6% Bonds with a Face