Problem 14B-2 (Part Level Submission)

Sage Co. is building a new hockey arena at a cost of $2,750,000. It received a downpayment of $470,000 from local businesses to support the project, and now needs to borrow $2,280,000 to complete the project. It therefore decides to issue $2,280,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 9%.

(c) Your answer is partially correct. Try again. Assume that on luly 1, 2019, Sage Co. redeems half of the bonds at a cost of $1,222,500 plus accrued interest. Prepare the journal entry to record this redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2019 Interest Expense 53601.23 Premium on Bonds Payable 3399.77 Cash 57000 To record interest) July 1, 2019 TRands Payable 1140000 Premium on Bonds Payable 3399 Loss on Redemption of Bonds 75702 Cash 1291803 (To record reacquisition)