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On January 1,2025, Indigo Company purchased 12% bonds having a maturity value of $310,000 for...

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Accounting

On January 1,2025, Indigo Company purchased 12% bonds having a maturity value of $310,000 for $333,502.59. The bonds provide the bondholders with a 10% yield. They are dated January 1,2025, and mature January 1,2030, with interest received on January 1 of each year. Indigo Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.
\table[[2025,$331,200,2028,$320,200
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