Current Attempt in Progress

Your answer is partially correct.

On June $30,2017,$ Whispering Company issued $12\%$ bonds with a par value of $$750,000$ due in $20$ years. They were issued at $98$ and

were callable at $104$ at any date after June $30,2025.$ Because of lower interest rates and a significant change in the company's credit

rating, it was decided to call the entire issue on June $30,2026,$ and to issue new bonds. New $8\%$ bonds were sold in the amount of

$$920,000$ at $102$ ; they mature in $20$ years. Whispering Company uses straight$-$line amortization. Interest payment dates are

December $31$ and June $30.$

$($a$)$ Prepare journal entries to record the redemption of the old issue and the sale of the new issue on June $30,2026.$

$($b$)$ Prepare the entry required on December $31,2026,$ to record the payment of the first $6$ months' interest and the

amortization of premium on the bonds.