Danny Ferry Co. sells $250,000 of 10% bonds on March 1, 2007. The bonds pay interest on September 1 and March 1. The due date of the bond is September 1, 2010. The bonds yield 12%. Give entries through December 31, 2008.

Round to the nearest dollar

Instructions:

Prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective interest method for discount amortization. Amortize discount on interest dates and at year end. (Assume the no reversing entries are made.)