On January 1, 2012, the Mara Corporation sold five-year bounds with a stated interest rate of 12% bonds for $107,580. The total face value of the bonds was $100,000. Interest is payable annually on December 31 of each year. The effective (market) interest rate was 10%. Mara amortizes the bonds using the effective-interest rate method.

On December 30, 2013, the Joanne Company purchased (on the open market) $50,000 face value of Maras bonds for a total cost of $61,154. The market interest rate at that time was 8%. The bonds were retired on January 1, 2016 (one year before maturity) by a payment of $98,000.

Required: a. What was the present value (and thus the price) of the bonds at the time of issuance?

b. Show the debt-related journal entries recorded by Mara during 2012 and 2013. Show details of your calculations; round to the nearest dollar.

c. Present the debt-related journal entry (or entries) for Mara during 2016. Show details of your calculations; round to the nearest dollar.