Problem $2$: E$13\mathrm{.}14($LO $1,2)($Entries for Redemption and Issuance of Bonds$)($Adjusted$)$ On June $30,2017,$ County Company issued $10\%$ bonds with a par value of $$800,000$ due in $20$ years. The market rate of interest for similar bonds was $12\%.$ They were callable at $104$ at any date after June $30,2018.$ Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on July $1,2018,$ and to issue new bonds. New $9\%$ bonds were sold in the amount of $$1,000,000$ at $102$ ; they mature in $20$ years. County Company uses straight$-$line amortization. Interest payment dates are December $31$ and June $30.$

Instructions

a$.$ Prepare the journal entry for the issuance of the bonds on June $30,2017.$

b$.$ Prepare the journal entry for payment of interest and amortization of premium$/$discount on December $31,2017.$

c$.$ Prepare the journal entry for payment of interest and amortization of premium$/$discount on June $30,2018.$

d $.$ Prepare journal entries to record the redemption of the old issue and sale of the new issue on July $1,2018.$