E$16\mathrm{.}3($LO $1)($Entries for Held$-$to$-$Maturity Securities$)$ On January $1,2025,$ Hi and Lois Company purchased $12\backslash \%$ bonds having a maturity value of $\backslash (\backslash$$ $300,000\backslash )$ for $\backslash (\backslash$$ $322,744\mathrm{.}44\backslash ).$ The bonds provide the bondholders with a $\backslash (10\backslash \%\backslash )$ yield. They are dated January $1,2025,$ and mature January $1,2030,$ with interest received on January $1$ of each year. Hi and Lois Company uses the effective$-$interest method to allocate unamortized discount or premium. The bonds are classified in the held$-$tomaturity category.

Instructions

a$.$ Prepare the journal entry at the date of the bond purchase.

b$.$ Prepare a bond amortization schedule.

c$.$ Prepare the journal entry to record the interest revenue and the amortization at December $31,2025.$

d$.$ Prepare the journal entry to record the interest revenue and the amortization at December $31,2026.$ E$16\mathrm{.}3($LO $1)($Entries for Held$-$to$-$Maturity Securities$)$ On January $1,2025,$ Hi and Lois Company purchased $12\backslash \%$ bonds having a maturity value of $\backslash (\backslash$$ $300,000\backslash )$ for $\backslash (\backslash$$ $322,744\mathrm{.}44\backslash ).$ The bonds provide the bondholders with a $\backslash (10\backslash \%\backslash )$ yield. They are dated January $1,2025,$ and mature January $1,2030,$ with interest received on January $1$ of each year. Hi and Lois Company uses the effective$-$interest method to allocate unamortized discount or premium. The bonds are classified in the held$-$tomaturity category.

Instructions

a$.$ Prepare the journal entry at the date of the bond purchase.

b$.$ Prepare a bond amortization schedule.

c$.$ Prepare the journal entry to record the interest revenue and the amortization at December $31,2025.$

d$.$ Prepare the journal entry to record the interest revenue and the amortization at December $31,2026.$