Jyoti Inc. had outstanding $10 million of 8% bonds (interest payable March 31 and October 31) due in 12 years. Jyoti was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $5 million of 10-year, 6% bonds (interest payable July 1 and January 1) at 97. A portion of the proceeds was used to call the 8% bonds at 105 on October 1. The unamortized bond discount for the 8% bonds was $1.1 million on October 1. Jyoti prepares financial statements in accordance with IFRS.
Instructions
Prepare the necessary journal entries to record the issue of the new bonds and the retirement of the old bonds.