(Answered) Problemon january 1 2017 sweet company purchased 11 bonds

Accounting

Problem

On January 1, 2017, Sweet Company purchased 11% bonds, having a maturity value of $312,000, for $ 336,270.95. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1, of each year. Sweet Company uses the effective-interest method to allocate amortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows

2017   $333,900    2020   $321,800
2018    $320,900 2021   $312,000
2019   $320,000

(a) Prepare the journal entry at the date of the bond purchase.

(b) Prepare the journal entries to record the interest revenue and recognition

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