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General Accounting Discussions: Investment in bonds

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    Can anyone help me with the investment in bonds problem. I need to do journal entries.
    Here is the problem:-
    On June1, 2004 XYZ co. Purchased five $1000 bonds issued by the city of Centerville School District. These bonds were purchased at 105 plus purchased interest. $100 in commission and taxes was paid on the trade. The contract rate on these bonds is 6% with interest payable on 4/1 and 10/1; these bonds mature 4/1/2009. It is the intention of management to hole these bonds untill they mature. On December 31, 2004, these bonds had a fair value of 104. XYZ uses Straight line method to amortize premiums or discount on investments.
    I am assuming that this is Held to Maturity investment. Please help me with the journal entries for year 2004 for XYZ Co.

    Thanks
  2.  
    see below for journal entries related to bonds....

    http://vitalbusinessinfo.blogspot.com/2009/10/accounting-for-bonds.html

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