Question - Vaughn Company purchased, on January 1, 2017, as a held-to-maturity investment, $67,000 of the 9%, 5-year bonds of Chester Corporation for $62,047, which provides an 11% return.
Prepare Vaughn's journal entries for (a) the purchase of the investment, and (b) the receipt of annual interest and discount amortization. Assume effective-interest amortization is used.