On December 31, 1989, Molly Corporation sold \(\$ 2.4\) million of its own \(13.5 \%\), 10 -year bonds. The bonds were dated December 31, 1989, with interest payable on each June 30 and December 31, and were sold to yield the buyers a \(12 \%\) annual return. The corporation uses the straight-line method of amortizing premium or discount.

\section*{Required}

1. Prepare a calculation to show the price at which the bonds were sold. (Use the present value tables, Tables \(10-1\) and 10-2, pages 409 and 411.)

2. Prepare a form with the columnar headings of Illustration 11-5 and fill in the amounts for the first two interest periods of the bond issue. Round all amounts to the nearest whole dollar.

3. Prepare entries in general journal form to record the sale of the bonds and the first two payments of interest.

Prepare general journal entries to record the following transactions of Transcon Corporation. Use the present value tables, Tables \(10-1\) and 10-2, pages 409 and 411, as necessary, to calculate the amounts in your entries. Remember to round all amounts to the nearest whole dollar.

1989 Dec. 31 Sold \(\$ 900,000\) of its own \(13.3 \%, 10\)-year bonds dated December 31, 1989, with interest payable on each June 30 and December 31. The bonds sold for a price that reflected a \(14 \%\) market rate of bond interest.

1990 June 30 Paid the semiannual interest on the bonds and amortized a portion of the discount calculated by the straight-line method.

Dec. 31 Paid the semiannual interest on the bonds and amortized a portion of the discount calculated by the straight-line method.

31 Deposited \(\$ 46,542\) with the sinking fund trustee to establish the sinking fund to repay the bonds.

1991 Dec. 30 Received the report of the sinking fund trustee that the sinking fund had earned \(\$ 6,516\).

1999 Dec. 31 Received a report from the sinking fund trustee which noted that the bondholders had been paid \(\$ 900,000\) on that day. Included was a \(\$ 2,840\) check for the extra cash accumulated in the sinking fund.

Prepare general journal entries to record the following bond transactions of Bennett Corporation.

1989 Oct. 1 Sold \(\$ 3.5\) million par value of its own \(9.7 \%, 10\)-year bonds at a price to yield the buyers a \(9 \%\) annual return. The bonds were dated October 1, 1989, with interest payable on each April 1 and October 1.