Snyder Software Inc. successfully developed a new spreadsheet program. However, to produce and market the program, the company needed additional financing. On January 1, 2024, Snyder borrowed money as follows.

1. Snyder issued \(\$ 500,000,11 \%, 10\)-year bonds. The bonds sold at face value and pay interest on January 1.

2. Snyder issued \(\$ 1.0\) million, \(10 \%\), 10-year bonds for \(\$ 886,996\). Interest is payable on January 1 . Snyder uses the straight-line method of amortization.

Instructions

a. For the \(11 \%\) bonds, prepare journal entries for the following items.

1. The issuance of the bonds on January 1,2024 .

2. Accrue interest expense on December 31, 2024.

3. The payment of interest on January 1,2025 .

b. For the 10 -year, \(10 \%\) bonds:

1. Journalize the issuance of the bonds on January 1,2024 .

2. Prepare the entry for the redemption of the bonds at 101 on January 1,2027 , after paying the interest due on this date. The carrying value of the bonds at the redemption date was \(\$ 920,897\).