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

1 Shamrock Inc sells $214 million of 10 bonds on March 1, 2017 The bonds pay interest on September 1 and March 1 The bonds due date is September 1, 2020 The bonds yield 12.

2 Pearl Ltd sells $560 million of 11 bonds on June 1, 2017 The bonds pay interest on December 1 and June 1 The bonds due date is June 1, 2021 The bonds yield 10 On October 1, 2018, Pearl buys back $112 million worth of bonds for $162 million

Instructions

Round to the nearest dollar.)

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