In the following two independent cases, the company closes its books on December $31$:

$1.$

$2.$

Tamarisk Inc. sells $$1\mathrm{.}87$ million of $8\%$ bonds on March $1,2023.$ The bonds pay interest on September $1$ and March $1.$ The bonds' due date is September $1,2026.$ The bonds yield $10\%.$

Pearl Ltd$.$ sells $$6\mathrm{.}20$ million of $9\%$ bonds on June $1,2023.$ The bonds pay interest on December $1$ and June $1.$ The bonds' due date is June $1,2027.$ The bonds yield $8\%.$ On October $1,2024,$ Pearl buys back $$1\mathrm{.}24$ million worth of bonds for $$1\mathrm{.}61$ million, including accrued interest.

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

Prepare all of the relevant journal entries from the time of sale until the date indicated.

For situation $1,$ prepare the journal entries through December $31,2024.$ Assume that no reversing entries were made. Use the amounts arrived at from using $(1)$ factor tables, $(2)$ a financial calculator, or $(3)$ Excel function PV from the time of sale until the date indicated. Use the effective interest method for discount and premium amortization. $($Hint: Refer to Chapter $3$ for tips on calculating.$)($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places e$.$g$.58,971.$

Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit