Answer:
Cash (2.00% × $770,000) = $15,400
Interest revenue (2.50% × $690,000) = $17,250.
Discount = 770,000 - 690,000 = 80,000
Date General Journal Debit Credit
July 1, 2016 Investment in bonds 770,000
Discount on bond investment 80,000
Cash 690,000
Dec 31, 2016 Cash 15,400
Discount on bond investment 1850
Interest revenue 17,250