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.
(1) sanford co. sells $500,000 of 10% bonds on march 1, 2014. the bonds pay interest on september 1 and march 1. the due date of the bonds is september 1, 2017. the bonds yield 12%. give entries through december 31, 2015.
(2) titania co. sells $400,000 of 12% bonds on june 1, 2014. the bonds pay interest on december 1 and june 1. the due date of the bonds is june 1, 2018. the bonds yield 10%. on october 1, 2015, titania buys back $120,000 worth of bonds for $126,000 (includes accrued interest). give entries through december 1, 2016.