Larkspur, Inc. had outstanding $5,540,000of11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $8,870,000of10%, 15-year bonds (interest payable July 1 and January 1) at99. A portion of the proceeds was used to call the11% bonds (with unamortized discount of $55,400) at101on August 1.

Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.(Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

July 1

(To record issuance of10% bonds)

August 1

(To record retirement of11% bonds)