On January 1, 2017, Kenn Corp. purchased at par 10% bonds having a maturity value of $300,000.

Question:

On January 1, 2017, Kenn Corp. purchased at par 10% bonds having a maturity value of $300,000. They are dated January 1, 2017, and mature on January 1, 2022, with interest receivable on December 31 of each year. The bonds are accounted for using amortized cost model.

Instructions:

a) Prepare the journal entry to record the bond purchase.

b) Prepare the journal entry to record the interest received for 2017.

c) Prepare the journal entry to record the interest received for 2018.

d) Prepare the journal entry to record the redemption of the bond at maturity.

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...