Question - Matt Perry, Inc. had outstanding $6,160,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,228,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 97. A portion of the proceeds was used to call the 11% bonds at 103 on August 1. Unamortized bond discount and issue cost applicable to the 11% bonds were $138,000 and $37,100, respectively.
Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.