Venezuela Co. is building a new hockey arena at a
cost of	$8,000,000	. It received a downpayment of			$2,000,000	from local
businesses to support the project, and now needs to borrow					$6,000,000	to complete
the project. It therefore decides to issue			$6,000,000	of	10.50%	10
-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each
January 1. The bonds yield		10.00%	.
.
Instructions:
(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2016.
Jan 1, 16
Present value of principal formula =
Present value of interest formula =
Present selling value of the bonds =
Jan 1, 16
(b) Prepare a bond amortization schedule up to and including January 1, 2020, using the effective interest method.
	Date	Interest Paid	Interest Expense	Premium Amortization	Bond Carrying Value
	Jan 1, 16
	Jan 1, 17
	Jan 1, 18
	Jan 1, 19
	Jan 1, 20
(c) Assume that on Jan 2, 2019, Venzuela Co. retires half of the bonds at a cost of						$3,095,000
plus accrued interest. Prepare the journal entry to record this retirement.
	Entry for reacquisition