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On January 1. 2023. Pronghorn Company purchased $416,000 worth of 8% bonds of Aguirre Co....

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Accounting

On January 1. 2023. Pronghorn Company purchased $416,000 worth of 8% bonds of Aguirre Co. for $383.877. The bonds were purchased to yield 10% interest. Interest is payable semi-annually, on July 1 and January 1. The bonds mature on January 1, 2028, Pronghorn uses the effective interest method to amortize the discount or premium. On January 1, 2025, to meet its liquidity needs, Pronghorn sold the bonds for $385,555, after receiving interest.

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