Macy’s, Inc., operates nearly 850 Macy’s and Bloomingdale’s department stores nationwide. The company does more than $24 billion in sales each year.
Assume that, as part of its cash management strategy, Macy’s purchased as a long-term investment $12 million in 10-year bonds for $13,785,600 cash on July 1, 2014. The bonds pay 8 percent interest semiannually on June 30 and December 31. The market rate on the bonds on the date of purchase was 6 percent.

Required:
1. Record the purchase of the bonds on July 1, 2014.
2. Record the receipt of interest on December 31, 2014 (including applying the effective interest amortization method).