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, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021.
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.

Required:
For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated.

1-Mar-20 :

Cash (Dr.) $472,090

Discount on Bonds Payable (Dr.) $27910

Bonds Payable (Cr.) $500,000

1-Sep-20:

Interest Expense (Dr.) $28,325

Discount on Bonds payable (Dr.) $3,325

Cash (Cr.) $25,000

31-Dec-2020:

Interest Expense (Dr.) $19,017

Discount on Bonds Payable (Cr.) $2,350

Interest payable (Cr.) $16,667

Explanation:

1-Mar-2021:

Interest Expense (Dr.) $9,508

Interest Payable (Dr.) $16,667

Discount on Bonds Payable (Dr.) $1,175

Cash (Cr.) $25,000

1-Sep-21:

Interest Expense (Dr.) $28,736

Discount on Bonds payable (Dr.) $3,736

Cash (Cr.) $25,000

31-Dec-2021:

Interest Expense (Dr.) $19,308

Discount on Bonds Payable (Cr.) $2,641

Interest payable (Cr.) $16,667

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