Sunland Company issued its $9\%,25-$year mortgage bonds in the principal amount of $$2,750,000$ on January $2,2006,$ at a

discount of $$151,000,$ which it proceeded to amortize by charges to expense over the life of the issue on a straight$-$line

basis. The indenture securing the issue provided that the bonds could be called for redemption in total but not in part at any

time before maturity at $105\%$ of the principal amount, but it did not provide for any sinking fund.

On December $18,2020,$ the company issued its $12\%,20-$year debenture bonds in the principal amount of

$$4,340,000$ at $102,$ and the proceeds were used to redeem the $9\%,25-$year mortgage bonds on January $2,2021.$ The

indenture securing the new issue did not provide for any sinking fund or for redemption before maturity.

$($a$)$ Prepare journal entries to record the issuance of $(1)$ the $12\%$ bonds and $(2)$ the redemption of the $9\%$ bonds. $($If no entry is

required, select $"$No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when

amount is entered. Do not indent manually.$)$

No$.$

Date

Account Titles and Explanation

Debit

Cred

$(1)$

December

$18,2020$

$(2)$ January $2,$

$2021$