Larkspur Inc. had outstanding $$11,000,000$ of $8\mathrm{.}25\%$ bonds $($interest payable March $31$ and September $30)$ due in $12$ years. Larkspur was able to reduce its risk rating through investing in more real estate. As a result, on September $1,$ it issued $$6,000,000$ of $10-$vear, $6\%$ bonds $($interest payable July $1$ and January $1)$ at $98.$ The proceeds plus additional cash was used to call the $8\mathrm{.}25\%$ bonds at $105$ on October $1.$ The unamortized bond discount for the $8\mathrm{.}25\%$ bonds was $$1,187,000$ on October $1.$ Larkspur prepares financial statements in accordance with IFRS.

Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. $($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

$($To record issuance of $6\%$ bonds$)$

$($To record retirement of $8\mathrm{.}25\%$ bonds$)$

eTextbook and Media

List of Accounts