On June 30, 2012, Indigo Company issued 12% bonds with a par value of $790,000 due in 20 years. They were issued at 98 a

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On June 30, 2012, Indigo Company issued 12% bonds with
a par value of $790,000 due in 20 years. They were issued
at 98 and were callable at 104 at any date
after June 30, 2020. Because of lower interest rates and a
significant change in the company’s credit rating, it was decided
to call the entire issue on June 30, 2021, and to issue new bonds.
New 8% bonds were sold in the amount of
$1,050,000 at 102; they mature in 20
years. Indigo Company uses straight-line amortization.
Interest payment dates are December 31 and June 30.
(Round answers to 0 decimal places, e.g. 38,548. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. Credit account titles are automatically
indented when amount is entered. Do not indent
manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
(a)
(To record the redemption of the old issue)
(b)
(To record the sale of the new issue)