amity construction company issued 100 000 of 10 bonds on january 1 2003 the maturity 577692

Amity Construction Company issued $100,000 of 10% bonds on January 1, 2003. The maturity date of the bonds is January 1, 2013. Interest is payable January 1 and July 1. The bonds were sold at 111.4 on July 1, 2003. The company uses the straight line method of amortizing bond premiums and discounts.

1.Make the required journal entries for each of the following dates:

a.July 1, 2003.

b.December 31, 2003.

c.January 1, 2004.

d.July 1, 2004.

2.Because of a substantial decline in the market rate of interest, Amity Construction Company purchased all the bonds on the open market at face value (100) on July 1, 2006. The following entry had just been made on that day:

Made semiannual interest payment on the bonds and amortized bond premium for six months. Prepare the journal entry to record the retirement of the bonds on July 1, 2006.