Empire Inc. is building a new Death Star at a cost of $2,500,000. Empire is able to internally finance $500,000 of the project, but must borrow the remaining $2,000,000 in the Hutt debt market. On January 1st, 2016, Empire therefore issues $2,000,000 of 10.5%, 10-year bonds. The bonds pay interest annually every January 1st and are issued at a market rate of 10%. Empire pays their underwriter, Jabba Banking Co., $50,000 in bond issuance costs.

Required: 1. Prepare the journal entry to record the bond issuance on January 1, 2016. 2. Prepare the amortization schedule for the bonds entire bonds life. 3. Assume that on July 1, 2019, Empire redeems a quarter of the bonds at a cost of $532,500 plus accrued interest. Prepare the journal entry for this redemption.