Freddy Corporation purchased $1,500,000, 8%, five year bonds on January 1, 2018. Interest is payable on December 31 of each year. When the bonds were issued the market rate was 10%. Freddy records the...

Extracted text: Freddy Corporation purchased $1,500,000, 8%, five year bonds on January 1, 2018. Interest is payable on December 31 of each year. When the bonds were issued the market rate was 10%. Freddy records the following transactions. Round all calculations to the nearest dollar. See attached spreadsheet I. Prepare the journal entry for the purchase of the securities which are classified as Available for Sale securities. Prepare all journal entries required on December 31, 2019. Freddy uses the effective interest amortization method. On December 31, 2019, the fair market value of the bonds was $1,450,000. The fair market value of the bonds on December 31, 2018, was $1,500,000.