E17-3B (Entries for Held-to-Maturity Securities) On January 1, 2014, Hummer Company purchased 5% bonds, having a maturity value of $500,000, for $428,938. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2014, and mature Januar

E17-3B (Entries for Held-to-Maturity Securities) On January 1, 2014, Hummer Company purchased 5% bonds, having a maturity value of $500,000, for $428,938. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2014, and mature January 1, 2024, with interest receivable June 30 and December 31 of each year. Hummer Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.
Instructions
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare the first 3 years of a bond amortization schedule.
(c) Prepare the journal entries to record the interest received and the amortization for 2014.