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On May 1, 2018, Kirmer Corp. purchased $1,500,000 of 12% bondswith interest payable on January...

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Accounting

On May 1, 2018, Kirmer Corp. purchased $1,500,000 of 12% bondswith interest payable on January 1 and July 1for $1,406,500 plus accrued interest. The bonds mature on January 1, 2024. Amortization is recorded when interest is received by the straight-line method (by months and rounded to the nearest dollar). (Assume bonds are available for sale.)

Instructions: (a) Prepare the entry for May 1, 2018.

(b) The bonds are sold on August 1, 2019 for $1,412,500 plus accrued interest. Prepare all entries required to properly record the sale.

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