Danka, Inc., develops and leases databases of publicly available information. The following selected transactions relate to certain securities acquired as a long-term investment by Danka, Inc., whose fiscal year ends on December 31. 2006
Sept. 1 Purchased $480,000 of Sheehan Company 10-year, 8% bonds dated July 1, 2006, directly from the issuing company, for $494,750 plus accrued 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, 2006, to December 31, 2011.) 2012
June 30 Received the semiannual interest on the Sheehan Company bonds.
Aug. 31 Sold one-half of the Sheehan Company bonds at 102 plus accrued interest. The broker deducted $400 for commission, etc., remitting the balance. Prior to the sale, $500 of premium on 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 $750 on the Sheehan Company bonds.
Instructions
Journalize the foregoing transactions.