Canadian Tire Corporation is Canada’s largest retailer of sporting goods, offering a comprehensive assortment of products, operating stores from coast to coast under the names Sport Chek, Sports Experts, Coast Mountain Sports, Sport Mart, and National Sports. Revenues from selling sporting goods are in excess of $ 1.6 billion each year. Assume that as part of its cash management strategy, Canadian Tire purchased $ 10 million in bonds at par for cash on July 1, 2015. The bonds pay 10 percent interest each June 30 and December 31 and mature in 10 years. Canadian Tire plans to hold the bonds until maturity.
Required:
1. Record the purchase of the bonds on July 1, 2015.
2. Record the receipt of interest on December 31, 2015.