On January 1, 20X5, P Company purchased in the open market $71,250 of the $75,000 par value, 8%, ten-year bonds of
S Company for $68,941.50. The bonds were sold on January 1, 20X1, with interest payments on January 1 and July 1 each year.
On June 30, 20X5, S Company purchased in the open market $250,000 par value, 7 1/2%, 20-year bonds of P Company for $254,375, including $9,375 accrued interest. These bonds were part of an original $500,000 par value issue that was sold 8 years ago. Interest is paid on January 1 and July 1 each year.