Question details

SlamDunk, Inc. sells $300,000 of 10% bonds on February 1, 2003.
$ 12.00

SlamDunk, 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.

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