Teal Mountain Inc. had outstanding $$9,000,000$ of $9\mathrm{.}00\%$ bonds $($interest payable March $31$ and September $30)$ due in $12$ years. Teal

Mountain was able to reduce its risk rating through investing in more real estate. As a result, on September $1,$ it issued $$4,000,000$ of

$10-$year, $7\%$ bonds $($interest payable July $1$ and January $1)$ at $98.$ The proceeds plus additional cash was used to call the $9\mathrm{.}00\%$ bonds at

$105$ on October $1.$ The unamortized bond discount for the $9\mathrm{.}00\%$ bonds was $$1,034,000$ on October $1.$ Teal Mountain prepares

financial statements in accordance with IFRS.

Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds. $($Credit account

titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No

Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit

Bonds Payable

$($To record issuance of $7\%$ bonds$)$

Loss on Redemption of Bonds

$($To record issuance of $7\%$ bonds$)$

$[]$

$($To record retirement of $9\mathrm{.}00\%$ bonds$)$