Macy’s, Inc., operates nearly 829 Macy’s and Bloomingdale’s department stores globally. The company does more than $25 billion in sales each year. Assume that as part of its cash management strategy, Macy’s purchased $12 million in bonds at par for cash on July 1 of the current year. The bonds pay 8 percent interest annually, with payments on June 30 and December 31, and mature in 10 years. Macy’s plans to hold the bonds until maturity.

Required:

1. Record the purchase of the bonds on July 1 of the current year.

2. Record the receipt of interest on December 31 of the current year.