Problem 14-2

PearlCo. is building a new hockey arena at a cost of $2,560,000. It received a downpayment of $450,000from local businesses to support the project, and now needs to borrow $2,110,000to complete the project. It therefore decides to issue $2,110,000of12%,10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield11%.

Parts A & B have been answered. Need assistance on C. (see 14-2.3)

Assume that on July 1, 2019, Pearl Co. redeems half of the bonds at a cost of $1,110,800plus accrued interest. Journalize the entry to record this redemption.