Selected transactions on the books of Ayayai Corporation follow:

May 1, 2020		Bonds payable with a par value of $700,000, which are dated January 1, 2020, are sold at 107 plus accrued interest. They are coupon bonds, bear interest at 10% (payable annually at January 1), and mature on January 1, 2030. (Use an interest expense account for accrued interest.)
Dec. 31		Adjusting entries are made to record the accrued interest on the bonds and the amortization of the proper amount of premium. (Use straight-line amortization.)
Jan. 1, 2021		Interest on the bonds is paid.
April 1		Par value bonds of $420,000 are repurchased at 101 plus accrued interest and are retired. (Bond premium is to be amortized only at the end of each year.)
Dec. 31		Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.

May 1, 2020 cash 772333 Bonds Payable Interest Expense Dec. 31, 2020 V 70000 70000 (To record accrued interest expense) Dec. 31, 2020 (To amortize the premium) an. 1, 2021 (To amortize the premium) Apr. 1, 2021 Bonds Payable Interest Expense 10500 Cash 434700 Gain on Redemption of Bonds 22412 (To record reacquisition of bonds) Dec. 31, 2021 Interest Expense 28000 Interest Payable 28000 Dec. 31, 2021 v (To amortize the premium)