On January 1, 2017, Garzon purchased 6% bonds (held-to-maturity) issued by PBS Utilities at a cost of

Question:

On January 1, 2017, Garzon purchased 6% bonds (held-to-maturity) issued by PBS Utilities at a cost of $40,000, which is their par value. The bonds pay interest semiannually on July 1 and January 1. For 2017, prepare entries to record Garzon's July 1 receipt of interest and its December 31 year-end interest accrual.