On January 1, 2014, Gleason Corp. issued $700,000, 4% bonds payable to finance company expansion. The bonds were dated January 1, 2014 and mature in five years on December 31, 2018. The bonds pay interest annually each December 31st. At the time of issuance, the market rate of interest for similarly risky investments was 6%.

1. Prepare an amortization schedule for the life of the bonds using the effective interest method of amortization.

2. Assuming Gleason Corp.s fiscal year ends October 31st, prepare all necessary entries written during the calendar year 2014 related to the bonds.

3. Gleason retired 30% of the bonds on January 1, 2016. Prepare the entry for the retirement, assuming the bonds were retired at 102.

4. Repeat question #4 assuming all information remains the same except the bonds were not retired until March 1, 2016.