On January$1,2000$the Lily Peng Corporation sold$30,000$of ifs$12\mathrm{.}0\%,30$year$,$ $$1,000$face value bond to yield$10\mathrm{.}0\%$annually$,$ Interest is pald semiannually.

Interest payment dates are June$30$and December$31$of each year. The company uses the effectlve interest method to amortize any bond discounts or premiums.

The issuing cost incurred were $$900,000,$they are to be amortized straight line over the estimated useful life of the bond. On July$1,2014,$the Lily Peng Corporation retires$6,000$of its bonds through an open market purchase$($it repurchases them for cash$).$

At that time the bonds were quoted on the market at a price of$103.$Tiffany Lane Usita, the Toronto industrialist, had purchased the bonds. Expense$/$amortize the bond issue cost to Interest Expense.

Required:

$1.$ Calculate the cash received from the sale of the bonds.

$2.$ Prepare the journal entries on the books of the Lily Peng Corporation to record the following January$1,2000$: issuance of the bonds$($Gross or Net Method is acceptable$).$

$3.$Prepare the journal entries on the books of the Lily Peng Corporation to record the following Payments of interest for the year$2000,$and any other amortization.

$4.$Prepare the journal entries on the books of the Lily Peng Corporation to record the following July$1,2014,$the extinguishment of$6,000$bonds$.$

$5.$Payments of interest for December$31,2014,$and any other amortization.

$6.$Prepare the accounting entry on July$1,2014,$if the policy of the Lily Peng Corporation had been to carry the bonds at fair market value.