Venezuela Co. is building a new hockey arena at a cost of $9,000,000. It received a downpayment of $2,000,000 from local businesses to support the project, and now needs to borrow $7,000,000 to complete the project. It therefore decides to issue $7,000,000 of 12% 10 '-year bonds. These bonds were issued on January 1, 2021, and pay interest annually on each January 1. The bonds yield 8.00%

Instructions:

(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2021.

(b) Prepare a bond amortization schedule up to and including January 1, 2024, using the effective interest method.

(c) Assume that on Jan 2, 2024, Venzuela Co. retires half of the bonds at a cost of $5,000,000 plus accrued interest. Prepare the journal entry to record this retirement.

A B C Venezuela Co. is building a new hockey arena at a \begin{tabular}{|l|l|c|c|c|c|} \hline 2 & cost of & $9,000,000 & It received a downpayment of & $2,000,000 & from local \\ \hline 3 & businesses to support the project, and now needs to borrow & & $7,000,000 & to complete \\ \hline 4 & the project. It therefore decides to issue & $7,000,000 & of & 12.00% & 10 \\ \hline \end{tabular} 5 -year bonds. These bonds were issued on January 1, 2021, and pay interest annually on each 6 January 1 . The bonds yield 8.00% 7 . Instructions: (a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2021. (b) Prepare a bond amortization schedule up to and including January 1,2024 , using the effective interest method