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McWherter Instruments sold $450 million of 10% bonds, dated January 1, on January 1, 2013. The bonds mature on December 31, 2032 (20 years). For bonds of similar risk and maturity, the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Blanton Technologies, Inc., purchased $450,000 of the bonds as a long-term investment.

a) Determine the price of the bonds issued on January 1, 2013.

b) Prepare the journal entries to record their issuance by McWherter and Blanton's investment on January 1, 2013.

c) Prepare the journal entries by McWherter and Blanton to record interest on June 30, 2013 (at the effective rate)

d) Prepare the journal entries by McWherter and Blanton to record interest on December 31, 2013 (at the effective rate).

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