Matt Perry, Inc. had outstanding $6,219,000 of 12% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,283,000 of 8%, 15-year bonds (interest payable July 1 and January 1) at 98. A portion of the proceeds was used to call the 12% bonds at 104 on August 1. Unamortized bond discount and issue cost applicable to the 12% bonds were $131,000 and $34,300, respectively.
Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.