On 1/1/25 SK Enterprises redeemed $500,000 of bonds at 99. At the time of redemption, the unamortized premium was $15,000. On that same day, SK Enterprises issued $600,000 of 7% 10-year refunding bonds for $644,636 with interest payable semiannually on July 1 and January 1. The bonds provided a 6% yield to the buyers. The company uses the effective interest rate method.

REQUIRED:

a. Prepare the entries necessary to record the redemption of the $500,000 bonds.

b. Prepare the entries necessary to record the issuance of the refunding bonds.

c. Prepare entries to record the first two interest payments.