In each of the following independent cases the company

closes

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

1. Sanford Co. sells $500,000 of 10% bonds on March 1, 2019. The bonds pay interest on
September 1 and March 1. The due date of the bonds is September 1, 2022. The bonds yield
12%. Give entries through December 31, 2020.

2. Titania Co. sells $400,000 of 12% bonds on June 1, 2019. The bonds pay interest on
December 1 and June 1. The due date of the bonds is June 1, 2023. The bonds yield 10%. On
October 1, 2020, Titania buys back $120,000 worth of bonds for $126,000 (includes accrued
interest). Give entries through December 1, 2021.

Instructions

For the two cases, prepare all of the relevant journal entries from the time of sale until the date
indicated. (Construct amortization tables where applicable.) Amortize premium or discount on
interest dates and at year-end. (Assume that no reversing entries were made; round to the
nearest dollar.)

In each of the following independent cases the company closes

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