Two independent situations follow:

1. On January 1, 2018, Cute Koalas Inc. issued $4,000,000 of 7%, 12-year, callable bonds priced to yield 6%. The bonds may be called at 102 on or after December 31, 2023. Interest is payable on June 30 and December 31. Cute Koalas calls the bonds on January 1, 2025.

2. On January 1, 2021, Cuddly Kangaroos Ltd. issued $6,000,000 of 5%, eight-year bonds priced to yield 6.5%. Interest is payable on June 30 and December 31. Cuddly repurchases the outstanding bonds on July 1, 2024, at which time the market rate of interest is 6%.

Required:

Prepare journal entries to record:
a. The sale and retirement of the bonds in Scenario 1.
b. The sale and retirement of the bonds in Scenario 2.