Use the following to answer questions 31-35:

On January 1, Year 1, DPH, Co. issued a $3,500,000, 5 year bond. Interest will be paid on June 30 and December 31 each year. The bond has a stated rate of 5% and was issued at 98. Ignore the effects of taxes for this problem.

31.	(6 points) Make the journal entry for the issuance of the bond.

32.	(16 points) Make the journal entries for the first two interest payments, assuming that DPH uses the effective interest method for amortizing any premiums or discounts on their debt. The effect interest rate on the bonds was 5.5%

33.

(15 points) On July 1, Year 4, DPH decided to retire 10% of the bonds in order to avoid violating a debt covenant on their major line of credit. On that day, the bonds were selling at 101. Make the journal entry to record the early retirement, assuming that DPH, Co. uses the straight-line method for amortizing any premiums or discounts on their debt.

34.

(22 points) On August 31st, Year 4, the bonds were selling at 97. Because of the good price, DPH decided to retire an additional 30% of the bond. Make any necessary journal entries to record the repurchase. Assume that the market price includes any accrued interest and that DPH is still using the straight-line method.

35.

(16 points) Before recording the bond retirements, DPH reported the following information:

Net Sales	$ 8,000,000
Net Income	$ 1,200,000
Current Assets	$ 1,800,000
Total Assets	$ 9,000,000
Current Liabilities	$ 1,350,000
Total Liabilities	$ 6,300,000

Calculate the company's ROA, Debt-to-Equity, and Current Ratios before and after the debt retirement. Assume all other necessary entries, including any interest on the bonds, have been properly recorded. (HINT: Since you don't have beginning values, just use the ending values for those ratios requiring averages!)

Use the following to answer questions 36-41:

At the end of last year, Tull Co. submitted paperwork to switch from a sole proprietor ship to a corporation. Just prior to year end, the company received final authorization from the state of Idaho to incorporate. In the articles of incorporation, Tull, Inc. is authorized to issues 1,000,000 shares of $2 par common stock. On December 31st, Mrs. Tull received 250,000 shares of common stock in exchange for her equity in the sole proprietorship.

36.	(3 points) Make the journal entry to record Tull's first equity offering on January 15th of the current year. The company issued 150,000 shares at par value.

37.	(5 points) Make the journal entry to record an additional equity offering on June 1st. The company issued 60,000 shares for $8 per share.

38.	(3 points) On August 15th, Tull decided to repurchase 15,000 shares of common stock in order to improve stock price. Make the appropriate journal entry to record the repurchase if the market price for Tull common stock on that day was $6 per share.

39.	(6 points) On November 11th, Tull's management decided that the stock price had increased sufficiently for them to reissue 7,500 shares of their treasury stock. Make the entry to record the reissue of these shares if the stock price was $17 per share.