Homework problem- Long term Liabilities (Issue and partial Redemption of bonds between interest payment date)

Star Center issued $2,000,000 of 5%, 20-year bonds. These bonds were issued on January 1, 2016 and pay interest annually on each January 1. The bonds yield 3% and was issued at $2,595,107

Required:

(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2016.

b) Prepare a bond amortization schedule up to and including January 1, 2020, using the effective-interest method.

c) Assume that on July 1, 2019, Star Center Co. redeems 50% of the bonds at a cost of $1,358,000 plus accrued interest. Prepare the journal entries to record this redemption.