On January 1, 2012, Jackson Corp. purchased $1.6 million of 10-year, 7% bonds for $1,658,157. The purchase price was based on a market interest rate of 6.5%. Interest is received semi-annually on July 1 and January 1. Jackson's year end is September 30. Jackson intends to hold the bonds until January 1, 2022, the date the bonds mature. The bonds' trading value was $1,660,000 on September 30, 2012.

Instructions

(a) Record the purchase of the bonds on January 1, 2012.

(b) Prepare a bond amortization schedule for the term of the bonds.

(c) Prepare the entry to record the receipt of interest on July 1, 2012.

(d) Prepare any adjusting entries required at September 30, 2012.

(e) Prepare the entry to record the repayment of the bonds on January 1, 2022.

(f) Show the financial statement presentation of the bonds at September 30, 2012.

(g) How would your answer to (d) change if the bonds were held for trading purposes?