Venezuela Co. is building a new hockey arena at a cost of $2,749,000. It received a downpayment of $512,900from local businesses to support the project, and now needs to borrow $2,236,100to complete the project. It therefore decides to issue $2,236,100of11%,10year bonds. These bonds were issued on January 1, 2011, and pay interest annually on each January 1. The bonds yield10%. Venezuela paid $50,800in bond issue costs related to the bond sale.

(a)Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2011.(Round answers to 0 decimal places, e.g. $38,548. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

(b)Prepare a bond amortization schedule up to and including January 1, 2015, using the effective interest method.(Round answers to 0 decimal places, e.g. $38,548.)

Date

Cash

Paid

Interest

Expense

Premium

Amortization

Carrying

Amount of

Bonds

1/1/11$

$

$

$

1/1/12

1/1/13

1/1/14

1/1/15

(c)Assume that on July 1, 2014, Venezuela Co. retires half of the bonds at a cost of $1,182,070plus accrued interest. Prepare the journal entry to record this retirement.(Round answers to 0 decimal places, e.g. $38,548. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

(To record interest.)

(To amortize bond issue costs.)

(To record reacquisition.)