In each of the following independent

cases, the company closes its books on December $31.$

$1.$ Sanford Co$.$ sells $$500,000$ of $10\%$ bonds on March $1,2020.$ The bonds pay interest on September $1$

and March $1.$ The due date of the bonds is September $1,2023.$ The bonds yield $12\%.$ Give entries

through December $31,2021.$

$2.$ Titania Co$.$ sells $$400,000$ of $12\%$ bonds on June $1,2020.$ The bonds pay interest on December $1$ and

June $1.$ The due date of the bonds is June $1,2024.$ The bonds yield $10\%.$ On October $1,2021,$ Titania

buys back $$120,000$ worth of bonds for $$126,000($includes accrued interest$).$ Give entries through

December $1,2022.$

Instructions

For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated.

Use the eff ective$-$interest method for discount and premium amortization $($construct amortization tables

where applicable$).$ Amortize premium or discount on interest dates and at year$-$end. $($Assume that no

reversing entries were made.$)$