1. On January 1, 2017, Park Rapids Lumber Company issued $80 million in 20-year, 10.5% bonds payable. Interest is payable semiannually on June 30 and December 31.

1. Record the journal entry when the bonds were issued on January 1, 2017 when the market rate was 10%, and record the payment of bond interest on June 30^th and December 31^st for 2017 and 2018.

b. Compute the net bond liability at December 31, 2018.

c. On January 1, 2019 the bonds were repurchased for 101. Record the journal entry for the repurchase of the bonds. This transaction is very similar to the sale of a fixed asset. 101 is the same as 101% of the face value of the bond.