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Matt Perry, Inc. had outstanding $6,226,000 of 12% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued

Matt Perry, Inc. had outstanding $6,226,000 of 12% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,084,000 of 8%, 15-year bonds (interest payable July 1 and January 1) at 97. A portion of the proceeds was used to call the 12% bonds at 102 on August 1. Unamortized bond discount and issue cost applicable to the 12% bonds were $121,000 and $39,400, respectively.

Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.

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