Problem #$4$

Ihvestment in Bonfls $($HTM Securifies$)$ HW

On Jan. $1,2023$ Philo Kvetch purchased $500$ bonds @ $ $$1,013,40$ per bond.

The new bond issue was priced such that the bonds have an yield $($annual$)$ of $4\mathrm{.}2\%$

The bond $($annual coupon$)$ rate is $4\mathrm{.}5\%$ over the $5-$year term of the bonds.

The bonds pay interest semi$-$annually.

$1-$Jan$-23$

$30-$Jun$-23$

Prepare the entry for the first semi$-$annual receipt of interest and amortization using the effective interest method.

Prepare the entry for the second semi$-$annual receipt of interest and amortization using the effective interest method.

Prepare the entry for the first semi$-$annual receipt of interest and amortization using the straight line method.

Dr

Dr

Cr

$30-$Jun$-23$

Prepare the entry for the purchase of the bonds

$31-$Dec$-23$

interest method.

Dr

Dr

Cr

Cr