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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

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