SweetCo. is building a new hockey arena at a cost of $2,360,000. It received a downpayment of $500,000from local businesses to support the project, and now needs to borrow $1,860,000to complete the project. It therefore decides to issue $1,860,000of10%,10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield9%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2016.

A bond amortization schedule up to and including January 1, 2020, using the effective interest method.

Assume that on July 1, 2019, Sweet Co. redeems half of the bonds at a cost of $1,023,400plus accrued interest. Prepare the journal entry to record this redemption.