Venezuela $Co.$ is building a new hockey arena. Information concerning the arena follows.

Cost of arena

Down payment received from local businesses to support the project

Borrowing needed to complete the project

Issuance of bonds on January $1,2024$

Interest is paid annually on January $2.$

Stated interest rate on bonds

Term of bonds in years

Yield on bonds

$$2,500,000$

$500,000$

$2,000,000$

$2,000,000$

$10\mathrm{.}00\%$

Instructions

a$.$ Prepare the journal entry to record the issuance of the bonds and the related bond issue costs

incurred on January $1,2024.$

b$.$ Prepare a bond amortization schedule up to and including January $1,2028,$ using the effective

interest method.

c$.$ Assume that on July $1,2027,$ Venezuela Co$.$ retires half of the bonds at a cost of $$1,065,000$

plus accrued interest. Prepare the journal entry to record this redemption.

Portion of bonds to be retired

$50\%$

Cost of bond retirement without accrued interest $$1,065,000$

NOTE: Enter a formula, a cell reference, or a value $($if you are unable to reference a cell$),$ into

the yellow shaded input cells. Your answers may differ from those determined using table

factors due to answers In Excel not rounding.