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1
Using electric mixer, beat butter and 3/4 cup sugar in large bowl until well blended.
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2
Beat in egg yolk, lemon peel and vanilla extract.
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3
Add all purpose flour and salt and beat until mixture begins to clump together.
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4
Divide dough into 3 equal pieces.
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5
Flatten each piece into disk; wrap each in plastic and refrigerate 2 hours.
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6
(Can be prepared 2 days ahead.
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7
Soften dough slightly at room temperature before rolling out.)
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8
Finely grind red and/or green hard candies separately in processor.
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9
Transfer each color of candy to separate small bowl; cover candies and set aside.
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10
Position 1 rack in center and 1 rack in top third of oven and preheat oven to 375F.
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11
Line 2 large baking sheets with parchment paper.
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12
Roll out 1 dough disk on lightly floured surface to 1/4-inch thickness.
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13
Using 2 1/2- to 2 3/4-inch-diameter cookie cutter or biscuit cutter, cut out cookies.
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14
Using small (about 1 inch in diameter) cookie cutter, make cutouts in center of each cookie.
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15
Transfer cookies to prepared baking sheets.
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16
Spoon ground hard candies into cookie cutouts, filling cutouts completely to same thickness as cookies.
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17
Sprinkle cookies lightly with additional sugar.
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18
Repeat with remaining dough disks, ground hard candies and additional sugar.
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19
Reroll dough scraps and cut out additional cookies.
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20
Place on baking sheets; fill with hard candies and sprinkle with additional sugar.
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21
Bake cookies until firm and light golden and ground candies look translucent, about 8 minutes.
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22
Cool cookies completely on baking sheets.
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23
(Can be prepared ahead.
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24
Store in airtight container at room temperature up to 1 week or freeze up to 1 month.)