Electronic Arts Inc. “is a global leader in digital interactive entertainment. We develop, market, publish and deliver games, content and services that can be played and watched on game consoles, PCs, mobile phones and tablets.” Popular brands include Battlefield, The Sims, Madden NFL, and Star Wars. The company reported over $5.5 billion in revenue in a recent year. Assume that as part of its cash management strategy, Electronic Arts purchased $12 million in bonds at par for cash on July 1 of the current year. The bonds pay 8 percent interest annually, with payments on June 30 and December 31, and mature in 10 years. The company plans to hold the bonds until maturity.

Required:

1. Record the purchase of the bonds on July 1 of the current year.

2. Record the receipt of interest on December 31 of the current year.