Problem:
Danka Inc. develops and leases databases of publicly avaiable information. The following selected transactions relate to certain securities acquired as a long term investment by Danka Inc. whose fiscal year ends on Dec. 31.
2005
Sept 1 Purchased $480,000 of Sheehan Company 10-year, 8% bonds dated July 1, 2005, directly from the issusing company, for $494,750 plus accured interest of $6,400.
Dec 31 Received the semiannual interest on the Sheehan Company bonds.
31 Recorded bond premium amortization of $500 on the Sheehan Company bonds. The amortization amount was determined by using the straight line method.
(Assume that all intervening transactions and adjustments have been properly recorded and that the number of bonds owned has not changed from December 31, 2005 to December 31, 2010)
2011
June 30 Received the semiannual interest on the Sheehan Company bonds.
Aug 31 Sold one half of the Sheehan Company bonds at 102 plus accured interest. The broker deducted $400 for commission ect., remmitting the balance. Prior to the sale $500 of the premium on the one-half of the bonds is to be amortized, reducing the carrying amount of those bonds to $242,875.
Dec 31 Received the semiannual interest on the Sheehan Company bonds.
31 Recorded bond premium amortization of the $750 on the Sheehan Company bonds.
I need to jounalize these entries.