Information from General Products balance sheet 2015

5% Short Term Notes Payable due on 3/31/16 8,000

Accrued Interest on 6% Bonds Payable 3,000

6% Bonds Payable due 2020 100,000

Prepare journal entries based on below information

6% Bonds Payable are issued on 1/1/15 to yield 8% interest and interest is paid semiannually on 1/1 and 6/30

General Products can redeem these Bonds any time after June 30,2016 @ 101.

To take advantage of lower interest rates and to finance the redemption of 6% Bonds,

On 9/1/16 General Products issued 5% Bonds in the face value of $100,000 to yield 6%

The maturity period of these 5% Bonds is 10 years and interest is paid semiannually on 1/1 and 6/30.

The proceeds from the issue of 5% Bonds are used to redeem 6% Bonds Payable @ 101 on 9/1/16.