Question: Using the data from Exercise 15-17, record the entries using the straight-line method for amortization of discounts and premiums. In exercise 15-17 On January 2,

Using the data from Exercise 15-17, record the entries using the straight-line method for amortization of discounts and premiums.
In exercise 15-17
On January 2, 2015, when the market interest rate was 6.5%, Maureen Company purchased $80,000, 10-year, 7% bonds at 103.6 with the intent to hold them to matu- rity. January 2 is the interest payment date.
a. Journalize the entry to record the bond purchase.
b. Journalize the accrued interest adjustment and premium amortization on December 31, 2015, using the effective interest method for amortization of discounts and premiums.
c. What is the relationship between the market rate of interest and the coupon rate on the bond investment acquisition date?

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aJan 2 HeldtoMaturity Investment in bonds 82880 Cash 82880 bDec 31 Interest Receivable 5600 ... View full answer

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