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On January 1 2013 a company pays $5222591 for a 5-year corporate bond with a face value of $5 million The bond pays interest at 5 percent on December

On January 1, 2013, a company pays $5,222,591 for a 5-year corporate bond with a face value of $5 million. The bond pays interest at 5 percent on December 31 of each year, and the principal is due on December 31,2017. The investment yields a 4 percent compound annual return to maturity. The company classifies the bond as a held-to-maturity investment. Required Prepare the journal entries to record the investment on January 1, 2013, receipt of the interest payments on December 31 of each year 2013 through 2017, and receipt of the bond principal on December 31, 2017, using the effective interest method.

Apr 20 2020 View more View Less

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