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 paid semi$-$annually. Interest payment dates are June $30$ and December $31$

of each year. The company uses the effective 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.