On July 1, 2010 Imperial Inc. Purchased $500,000 of Acme Corp. 10-year 4% bonds at 98 for the purpose of holding and earning interest revenue. The bonds pay interest semi-annually on January 1 and July 1. Imperial has a December 31 year end. At December 31, 2010 the bonds are trading at 99.
Assuming Imperial Inc. Purchased the bonds from Acme Corp. record the purchase of the bonds on July 1 for Imperial Inc. And Acme Corp.