On December 31, 20x0, the Robin Corporation issues $5,000,000 of 5% bonds. The bonds are due on December 31, 20x10 and were issued to yield 4.6%. The bonds pay interest semi-annually on June 30 and December 31. Bond issue costs of $53,000 were incurred.

Required –

a) Prepare all journal entries relative to this bond issue for the years ended December 31, 20x0 and December 31, 20x1.

b) Assume that on July 2, 20x7, Robin repurchases 45% of the bond issue at 105. Prepare the journal entry on July 2, 20x7. Also prepare the journal entry on December 31, 20x7.