Prepare the journal entries necessary to record issue

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Question - Larkspur, Inc. had outstanding $5,540,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $8,870,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 99. A portion of the proceeds was used to call the 11% bonds (with unamortized discount of $55,400) at 101 on August 1.

Required - Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds.

Reference no: EM132620832

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