Crane, Inc. had outstanding $5,860,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,880,000 of 11%, 15-year bonds (interest payable July 1 and January 1) at 97. A portion of the proceeds was used to call the 11% bonds (with unamortized discount of $58,600) at 101 on August 1. Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.

(To record issuance of 11% bonds)

(To record retirement of 11% bonds)