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On January 1, 2025, Whispering Company purchased $300,000,6% bonds of Aguirre Co. for $275,666. The...

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Accounting

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On January 1, 2025, Whispering Company purchased $300,000,6% bonds of Aguirre Co. for $275,666. The bonds were purchased to yield 8% interest. Interest is payable semiannually on July 1 and January 1 . The bonds mature on January 1, 2030. Whispering Company uses the effective-interest method to amortize discount or premium. On January 1,2027, Whispering Company sold the bonds for $277,397 after receiving interest to meet its liquidity needs. (a) Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

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