Prepare the journal entries required upon reacquisition

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Reference no: EM131976997

Problem

SlainDunk, Inc. sells $300,000 of 10% bonds on February 1, 2003. The bonds pay interest on August 1 and February 1. The due date of the bonds is August 1. 2006. The bonds yield 12%. The company has a year end of December 31. Show the journal entries required on the following dates:

a. February 1, 2003
b. August 1.2003
c. December 31, 2003
d. February 1, 2004.
e. Now, assume that on May 1, 2004, the company reacquires half the bonds ($150,000 face) for $154,000 including accrued interest. Assume that after the February 1 entry there is a remaining discount of $12, 636.

Prepare the journal entries required upon reacquisition.

Reference no: EM131976997

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