Marker Musical Products issued bonds with a face value of $100,000 and an annual stated interest rate of 8 percent on January 1, 1994. The effective interest rate on the bonds was 10 percent. Interest is paid semiannually on July 1 and January 1. As of December 31, 1996, the company reported the following dollar amounts for these bonds: Bonds payable $100,000 Less: Discount on bonds payable 3,546 $96,454 Marker Musical Products retired the bonds on July 2, 1997, by repurchasing them for $91,700 in cash. REQUIRED:

a. Provide the journal entry recorded on July 1, 1997, when the interest payment is made.

b. Prepare the journal entry to record the retirement of the bonds