On June 30, Year 5 Sarah Jane issued 14% bonds with a par value of $800,000 due in 20 years. They were issued at 99 and were callable at 103 at any date after June 30, Year 15. Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on September 30, Year 16, and to issue new bonds. New 12% bonds were dated June 30, Year 16 but not sold until September 30, Year 16 in the amount of $900,000 at 101 plus accrued interest; they mature on June 30, Year 26. Sarah Jane follows ASPE and uses straight-line amortization. Interest payment dates are December 31 and June 30 on both the old issue and new issue. Required: 1. (a) Prepare the entry to record the interest expense from July 1, Year 16 to September 30th Year 16 when the bonds were recalled. 2. (b) Prepare the entry to record the retirement of the old issue on September 30, Year 16. 3. (c) Prepare the journal entry to record the sale of the new issue on September 30, Year 16. 4. (d) Prepare the entry required on December 31, Year 16. - 5. (e) BONUS assume that the new issue was sold on June 30, Year 16 (i.e. has a full 10 year term). What is the yield rate of the new issue? Show your answer to 4 decimal points.