On July 1, Sleepy, Inc. purchased 100 of Rabbit Co.'s 6%, $1,000 bonds. The bonds, which pay interest on March 1 and September 1, were purchased at 102 plus accrued interest to yield 4%. The investment was classified as held-to-maturity securities. Effective interest amortization is used.
Required:
Prepare journal entries for
a.July 1
b.September 1
c.December 31

Question

On July 1, Sleepy, Inc. purchased 100 of Rabbit Co.'s 6%, $1,000 bonds. The bonds, which pay interest on March 1 and September 1, were purchased at 102 plus accrued interest to yield 4%. The investment was classified as held-to-maturity securities. Effective interest amortization is used.
Required:
Prepare journal entries for 
a.July 1
b.September 1
c.December 31

Quizplus · Accepted Answer

The Answer of On July 1, Sleepy, Inc. purchased 100 of Rabbit Co.'s 6%, $1,000 bonds. The bonds, which pay interest on March 1 and September 1, were purchased at 102 plus accrued interest to yield 4%. The investment was classified as held-to-maturity securities. Effective interest amortization is used.
Required:
Prepare journal entries for 
a.July 1
b.September 1
c.December 31