P$13\mathrm{.}2$B $($LO $1,2,3)($Issuance and Retirement of Bonds$)$ StarCenter Co$.$ is building a new music

arena at a cost of $$5,600,000.$ It received a down payment of $$600,000$ from local businesses to support

the project, and now needs to borrow $$5,000,000$ to complete the project. It therefore decides to issue

$$5,000,000$ of $8\%,20-$year bonds. These bonds were issued on January $1,2024,$ and pay interest annually

on each January $1.$ The bonds yield $10\%.$

Instructions

a$.$ Prepare the journal entry to record the issuance of the bonds on January $1,2024.$

b$.$ Prepare a bond amortization schedule up to and including January $1,2028,$ using the effective$-$ir$-$

terest method.

c$.$ Assume that on July $1,2027,$ StarCenter Co$.$ retires $40\%$ of the bonds at a cost of $$2,040,000$ plus

accrued interest. Prepare the journal entry to record this retirement.