The balance sheet for Hathaway Company reports the following information on July 1, 2001:

Hathaway decides to redeem these bonds at 102 after paying semiannual interest. Prepare the journal entry to record the redemption on July 1, 2001.

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Long-term liabilities Bonds payable HATHAWAY COMPANY Balance Sheet (partial) Less: Discount on bonds payable $1,000,000 60,000 $940,000