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DISTAFF & SPEAR, Inc

Finance

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DISTAFF & SPEAR, Inc., issued $250,000 of 8%, 15-year bonds at 104 on July 1, 2007. Interest is payable semi-annually on December 31 and June 30. Through June 30, 2014 DISTAFF & SPEAR amortized $3,186 of the bond premium. On July 1, 2014 DISTAFF & SPEAR retired the bonds at 99.

(a)

Prepare journal entries to record the (i) issue (3 marks) and (ii) retirement of these bonds. (Assume the June interest expense has already been recorded.) (7 marks)