Economics Homework Help

Venzuela Co. is building a new hockey arena at a cost of $2,500,000. It received a down payment of $500,000 from local businesses to support the project and now needs to borrow $2,000,000 to complete

Venzuela Co. is building a new hockey arena at a cost of $2,500,000. It received a down payment of $500,000 from local businesses to support the project and now needs to borrow $2,000,000 to complete the project. It therefore decides to issue $2,000,000 of 10.5%, 10-year bonds. These bonds were issued on January 1, 2018, and pay interest annually on each January 1. The bonds yield 10%.

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a. Prepare the journal entry to record the issuance of the bonds on January  

1, 2018.

b. Prepare a bond amortization schedule up to and including January 1,  

2022.

c. Assume that on July 1, 2021, Venzuela Co. retires half of the bonds at a  

cost of $1,065,000 plus accrued interest. Prepare the journal entry to  

record this retirement.