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On January 1, 2019, Kelly Corporation acquired bonds with a face value of $700,000 for $677,378.51,...

On January 1, 2019, Kelly Corporation acquired bonds with a face value of $700,000 for $677,378.51, a price that yields a 10% effective annual interest rate. The bonds carry a 9% stated rate of interest, pay interest semiannually on June 30 and December 31, are due December 31, 2022, and are being held to maturity.

Required: Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the:

1. straight-line method of amortization

2. effective interest method of amortization

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