Flynn Company purchased 70 Rinehart Company 12%, 10-year, $1,000 bonds on January 1, 2015, for $70,000. The bonds pay interest semiannually on July 1...

Flynn Company purchased 70 Rinehart Company 12%, 10-year, $1,000 bonds on January 1, 2015, for $70,000. The bonds pay interest semiannually on July 1 and January 1. On January 1, 2016, after receipt of interest, Flynn Company sold 40 of the bonds for $38,500.

Prepare the journal entries to record the transactions described above.