On January 1, 2021, Shirley Corporation purchased 10% bonds dated January 1, 2021, with a face amount of $10 million. Th

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On January 1, 2021, Shirley Corporation purchased 10% bonds
dated January 1, 2021, with a face amount of $10 million. The bonds
mature in 2030 (10 years). For bonds of similar risk and maturity,
the market yield is 12%. Interest is paid semiannually on June 30
and December 31. (FV of $1, PV of $1, FVA of $1, PVA
of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables
provided.)

Required:
1. Determine the price of the bonds at
January 1, 2021.
2. Prepare the journal entry to record the
bond purchase by Shirley on January 1, 2021.
3. Prepare the journal entry to record
interest on June 30, 2021, using the effective interest
method.
4. Prepare the journal entry to record
interest on December 31, 2021, using the effective interest
method.